The common stock of Kute & Kuddly Kids Clothes, Inc. currently sells for $88.50 and its current (D0) dividend is $1.10. Determine the implied growth rate for Kute assuming that an investor's required rate of return is 14% and that earnings and dividends are expected to grow at a constant rate.
A) 13.9%
B) 12.3%
C) 13.8%
D) 12.6%
Correct Answer:
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