Given the following data, what is the stock’s expected growth rate according to the Gordon model?

Dividend per share just paid: $2

Current market price: $40

Required rate of return: .10

Assume the stock is priced in equilibrium.

Select one:

a. 6.94%

b. 4.76%

c. 2.01%

d. 5.65%

e. 3.32%

 

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