A firm has just paid a $$7\mathrm{.}00$ annual dividend. The dividend is projected to grow at $4\mathrm{.}20\%$ per year indefinitely. If the stock sells today for $$190\mathrm{.}00,$ what is the required rate of return on the stock?

Question $9$ Answer

a$.$

$11\mathrm{.}01\%$

b$.$

$7\mathrm{.}88\%$

c$.$

$8\mathrm{.}04\%$

d$.$

$7\mathrm{.}11\%$

e$.$

$4\mathrm{.}20\%$