Question
Rampart Corporation has a dividend yield of 1.8 %. Its equity cost of capital is 8.8 %, and its dividends are expected to grow at
Rampart Corporation has a dividend yield of 1.8 %. Its equity cost of capital is 8.8 %, and its dividends are expected to grow at a constant rate.
a. The growth rate will be nothing%. (Round to one decimal place.)
b. What is the expected growth rate of Rampart's share price? (Select the best choice below.)
A. With constant dividend growth, share price is also expected to grow at rate g = 1.8 %.
B. With constant dividend growth, share price is also expected to grow at rate g = 7.0 %.
C. With constant dividend growth, share price is also expected to grow at rate g = 8.8 %.
D. With constant dividend growth, share price is also expected to grow at rate g =7.0 % -1.8 % =5.2 %.
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