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Suppose You Know That a Company's Stock Currently Sells for $75

Question 91

Multiple Choice

Suppose you know that a company's stock currently sells for $75 per share and the required return on the stock is 14 percent.You also know that the total return on the stock is evenly divided between capital gains yield and a dividend yield.If it's the company's policy to always maintain a constant growth rate in its dividends,what is the current dividend per share?


A) $4.24
B) $4.91
C) $5.34
D) $5.76
E) $6.07

Correct Answer:

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