D????????-4????. Applying the Gordon Growth DD????
Refer to the information regarding AT????T Inc. in D12-46.
Required

a. What amount of dividends (per share) did AT&T declare for its common shareholders in 2015?

b. AT&T’s common stock was traded at $34.41 per share at the end of 2015. Use the Gordon growth model (the dividend discount model with an increasing perpetuity) to estimate the market’s expectation regarding AT&T’s average growth in dividends. Assume that its cost of equity capital is 3.6%.

c. Comment on the reasonableness of the implied dividend growth rate.