Quiz 1: Fin 819-02

Its return on equity is 20%. What is the dividend growth rate for the firm? A) 3% . B) 5% . C) 8% . D) 12% . E) None of the above. Answer: C. Response: g = (1 - 0.6)*20 = 8%. 10. Michigan Motor Company is currently paying a dividend of $1.50 per year. The dividends are expected to grow at a rate of 20% for the next three years and then a ... ................
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