Richtex Brick has a current dividend of $1.70, and the market value of its common stock is $28. The expected market return is 13%, and the risk-free rate is 9%. If Richtex stock is half as volatile as the market, and the market is in equilibrium, what rate of growth is expected for Richtex's dividends assuming a constant growth valuation model is appropriate for Richtex?
A) 4.93%
B) 4.65%
C) 5.37%
D) 5.41%

Question

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The Answer of Richtex Brick has a current dividend of $1.70, and the market value of its common stock is $28. The expected market return is 13%, and the risk-free rate is 9%. If Richtex stock is half as volatile as the market, and the market is in equilibrium, what rate of growth is expected for Richtex's dividends assuming a constant growth valuation model is appropriate for Richtex?
A) 4.93%
B) 4.65%
C) 5.37%
D) 5.41%

Richtex Brick Has a Current Dividend of $1