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Shares of S&M Family Outlet Inc. trade on the NYSE (NYSE: S&M). The shares traded today at a price of $17.87. Yesterday, S&M paid a
Shares of S&M Family Outlet Inc. trade on the NYSE (NYSE: S&M). The shares traded today at a price of $17.87. Yesterday, S&M paid a dividend of $1.09 per share. The next dividend is expected in one year's time. If investors require a 8.9% return and if the dividends are expected to grow at a constant rate forever, what growth rate is currently priced into the shares? The implicit return of the stock is: (Select the best choice below.) A. 2.4% B. 3.3% C. 3% D. 2.7%
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