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The Sisyphean Company Is Currently Trading for $25

Question 1

Multiple Choice

The Sisyphean Company is currently trading for $25.00 per share. The company is expected to pay a $2.50 dividend at the end of the year and its equity cost of capital is 14%. If the dividend payout rate is expected to remain constant, then the expected growth rate in the Sisyphean Company's earnings is closest to:


A) 6%
B) 4%
C) 8%
D) 2%

Correct Answer:

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