A stock with a required rate of return of 10 percent sells


A stock with a required rate of return of 10 percent sells for $30 per share. The stock’s dividend is expected to grow at a constant rate of 7 percent per year. What is the expected year-end dividend, D1, on the stock?

a.   $0.87

b.   $0.95

c.   $1.02

d.   $0.90

e.   $1.05

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Financial Management: A stock with a required rate of return of 10 percent sells
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