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Management · Q878

Financial Management

Graduate and Post Graduate · Management · question 878

Q878

Constant growth rate is 6.5% and an expected dividend yield is 3.4% then an expected rate of return would be

A.
9.90%
Answer
B.
10.00%
C.
3.10%
D.
19.12%

Answer: Option A

Solution

Answer: Option A
Solution:
Expected rate of return = Constant growth rate + Expected dividend yield
= 6.5% + 3.4% = 9.90%