Vidyalelo
Management · Q858

Financial Management

Graduate and Post Graduate · Management · question 858

Q858

An expected dividend yield is 5.5% and expected rate of return is 11.5% then constant growth rate would be

A.
2.09%
B.
-6.00%
C.
17.50%
D.
6.00%
Answer

Answer: Option D

Solution

Answer: Option D
Solution:
Constant growth rate = Expected rate of return - Expected dividend yield
= 11.5% - 5.5% = 6.00%