Question

13.

ABC Corporation's common stock dividend yield is 3.61%, it just paid a dividend of

$2.75, and is expected to pay a dividend of $2.89 one year from now. Dividends are

expected to grow at a constant rate indefinitely. What is the required rate of return on

ABC stock?

a.

7.3%

b.

8.7%

c.

9.5%

d.

10.6%

e.

11.2%