Determine growth rate in dividends

Reference no: EM1355619

The Jon's Shoe Company, whose common stock is currently selling for $40 per share, is expected to pay a $2.00 dividend in the coming year. If investors believe that the expected rate of return on XYZ is 14%, what growth rate in dividends must be expected?
a. 5%
b. 14%
c. 9%
d. 6%

Reference no: EM1355619

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