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Beefcake Burgers' Stock Has a Current Market Value of $80

Question 2

Multiple Choice

Beefcake Burgers' stock has a current market value of $80.65.The company just paid a dividend equal to $3.50 per share,which is expected to grow at a constant rate of 6 percent forever into the future.What is the rate of return required by Beefcake's marginal investors?


A) 10.3%
B) 6.0%
C) 10.6%
D) 15.0%
E) There is not enough information to answer this question.

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