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Dorpac Corporation has a dividend yield of 1.5%. Its equity cost of capital is 8.0%, and its dividends are expected to grow at a constant
Dorpac Corporation has a dividend yield of 1.5%. Its equity cost of capital is 8.0%, and its dividends are expected to grow at a constant rate. a. What is the expected growth rate of Dorpac's dividends? b. What is the expected growth rate of Dorpac's share price? a. What is the expected growth rate of Dorpac's dividends? The growth rate will be %. (Round to one decimal place.) b. What is the expected growth rate of Dorpac's share price? What is the expected growth rate of Dorpac's share price? (Select the best choice below.) O A. With constant dividend growth, the share price is also expected to grow at rate g = 1.5%. O B. With constant dividend growth, the share price is also expected to grow at rate g =6.5%. O C. With constant dividend growth, the share price is also expected to grow at rate g = 8.0%. D . With constant dividend growth, the share price is also expected to grow at rate g=6.5% -1.5% = 5.0%. O
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