FIN331-Financial Management-Fall 2017, WB21 Kouame 1 11/9/17 8:44 PM Test: Mid-T

Question

FIN331-Financial Management-Fall 2017, WB21 Kouame 1 11/9/17 8:44 PM Test: Mid-Term Exam 2 Time Remaining: 02:24:40 Submit Test This Question: 4 pts 25 of 25 (0 complete) This Test: 100 pts possible TC Corp paid a dividend today of $5 per share The dividend is expected to grow at a constant rate of 6.5% per year if is selling for $50.00 per share, the stockholders' expected rate of return is TC Corp stock OA, 16 50% B. 17.15% °C. 13.56%. D. 11.50% Subm Click to select your answer finvitation to Identify.pdf

Explanation / Answer

Expected rate of returrn=(Dividend for next period/Current price)+Growth rate

=(5*1.065)/50+0.065

which is equal to

=17.15%(B)

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