Question 24

Shareholders of ABC company expect to earn 15.5% required rate of return on the common stocks at a current price of $47.25. ABC just paid out dividends of $2 per share and

assumes to hold its dividend payout policy unchanged. Based on the Gordon Growth Model, what is ABC's implied dividend growth rate?

A. 10.81%

B. 11.27%

C. 14.87%

D. 13.50%