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Constant growth rate in dividends

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Reference no: EM131402344

Suppose you know a company's stock currently sells for $85 per share and the required return is 10 percent. You also know that the total return on the stock is evenly divided between the capital gains yield and the dividend yield. What is the current dividend per share if it's the company's policy to always maintain a constant growth rate in its dividends?

  • $4.25
  • $4.05
  • $4.37
  • $4.50
  • $4.64

Reference no: EM131402344

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