The dividend is expected to grow at a constant rate g


Hahn Manufacturing is expected to pay a dividend of $1.00 per share at the end of the year (D1 = $1.00). The stock sells for $40 per share, and its required rate of return is 11%. The dividend is expected to grow at a constant rate, g, forever. What is Hahn's expected growth rate?

a. 8.50%
b. 9.50%
c.10.00%
d. 8.00%
e.9.00%

 

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Finance Basics: The dividend is expected to grow at a constant rate g
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