Gray Manufacturing is expected to pay a dividend of $1.25 per share at the end of the year (D1 = $1.25) .The stock sells for $27.50 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) 5.54%
C) 6.07%
D) 6.91%
E) 5.95%
Correct Answer:
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