Hannett Inc.has a stock price of $40 and just reported earnings of $3 per share.The firm maintains a constant dividend payout of 65% and has an expected return on equity (ROE) of 16%.Based on the constant growth model,Hannett's expected rate of return is closest to:
A) 10.50%.
B) 10.75%.
C) 13.10%.
D) 13.50%.
Correct Answer:
Verified
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