What constant-growth rate in dividends is expected for a stock valued at $32.40 if next year's dividend is forecast at $2.20 and the appropriate discount rate is 13.6%?
A) 7.02%
B) 6.59%
C) 6.81%
D) 7.38%

Name: What constant-growth rate in dividends is expected for a stock valued at $32.40 if next year's dividend is forecast at $2.20 and the appropriate discount rate is 13.6%? A) 7.02% B) 6.59% C) 6.81% D) 7.38%
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Quizplus · Accepted Answer

$32.40 = $2.20/(0.136 − g); g = 0.0681, or 6.81%

What Constant-Growth Rate in Dividends Is Expected for a Stock