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Given the Information Below,calculate the Expected Growth Rate (G)of Dividends,using

Question 46

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Given the information below,calculate the expected growth rate (g) of dividends,using the constant growth model Given the information below,calculate the expected growth rate (g) of dividends,using the constant growth model   Beta = 1.75;r<sub>RF</sub> = 7 percent;r<sub>M</sub> = 11 percent;dividend payout ratio = 30 percent;r<sub>d</sub> = 10 percent (paid) on all long-term debt;P/E ratio = 10;sales = 5,000 units;sales price per unit = $5;variable cost per unit = $2;fixed cost = $1,000;common stock shares outstanding = 5,000;long-term debt outstanding = $10,000;tax rate = 40 percent.Assume equilibrium exists in the market. A)  11.34% B)  6.54% C)  11.0% D)  10.68% E)  10.19% Beta = 1.75;rRF = 7 percent;rM = 11 percent;dividend payout ratio = 30 percent;rd = 10 percent (paid) on all long-term debt;P/E ratio = 10;sales = 5,000 units;sales price per unit = $5;variable cost per unit = $2;fixed cost = $1,000;common stock shares outstanding = 5,000;long-term debt outstanding = $10,000;tax rate = 40 percent.Assume equilibrium exists in the market.


A) 11.34%
B) 6.54%
C) 11.0%
D) 10.68%
E) 10.19%

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