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Richtex Brick Has a Current Dividend of $1

Question 81

Multiple Choice

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 percent and the risk-free rate is 9 percent.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%

Correct Answer:

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