Business, 20.11.2020 01:00, kprincess16r

The required return for Williamson Heating's stock is 12%, and the stock sells for $40 per share. The firm just paid a dividend of $1.00, and the dividend is expected to grow by 30% per year for the next 4 years, so D4 = $1.00(1.30)4 = $2.8561. After t = 4, the dividend is expected to grow at a constant rate of X% per year forever. What is the stock's expected constant growth rate after t = 4, i. e., what is X? Select the correct answer.

a. 7.85%
b. 7.46%
c. 8.70%
d. 7.08%
e. 8.26%

Answers: 1

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The required return for Williamson Heating's stock is 12%, and the stock sells for $40 per share. Th...