Question 6

NYC's current cum dividend share price is 3.45 and the company has just announced a dividend per share of 20p. At what rate do investors expect dividends to grow in the future if the current share price is considered to be fair and shareholders require a rate of return of 15 per cent?

(a)8.33%

(b)3.25%

(c)4.56%

(d)7.67%