Tangshan China Company's stock is currently selling for $80.00 per share. The expected dividend one year from now is $4.00 and the required return is 13 percent
What is Tangshan's dividend growth rate assuming that dividends are expected to grow at a constant rate forever?
A) 8%
B) 9%
C) 10%
D) 11%
A
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Answer the following statement(s) true (T) or false (F)
1. Everything else being equal, the longer the period of time, the lower the present value. 2. The present value interest factor for i percent and n periods is the inverse of the future value interest factor for k percent and n periods. 3. Given a discount rate of zero percent and n periods of time, the present-value interest factor and future-value interest factor are equal. 4. Annuity due is an amount that occurs at the beginning of each period. 5. Future Value Interest Factor Annuity (FVIFA) is the future value of $1 ordinary annuity for n period compounded at k percent.