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What Is the Expected Constant Growth Rate of Dividends for a Stock

Question 92

Multiple Choice

What is the expected constant growth rate of dividends for a stock currently priced at $50, that just paid a dividend of $4, and has a required return of 18 percent?


A) 3.41 percent
B) 5.50 percent
C) 9.26 percent
D) 12.5 percent $50 = $4(1 + g) /(.18 - g)

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