Problem regarding the growth rate


Johnston Corporation's stock is currently selling at $45.83 per share. The last dividend paid (D0) was $2.50. Johnson is a constant growth firm. If investors require a return of 16% on Johnson's stock, what do they think Johnson's growth rate will be?

a. 6%

b. 7%

c. 8%

d. 9%

e. 10%

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Finance Basics: Problem regarding the growth rate
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