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Franklin Corporation Is Expected to Pay a Dividend of $1

Question 64

Multiple Choice

Franklin Corporation is expected to pay a dividend of $1.25 per share at the end of the year (D1 = $1.25) .The stock sells for $32.50 per share, and its required rate of return is 10.5%.The dividend is expected to grow at some constant rate, g, forever.What is the equilibrium expected growth rate?


A) 6.01%
B) 6.17%
C) 6.33%
D) 6.49%
E) 6.65%

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