Market projected growth rate

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Toy Corp. currently has stock outstanding with a market price $25.00. The market anticipates that the company will pay a dividend of $1.50 per share next year and Greshak's return on equity has averaged 10.0% while the market's required rate of return for the stock is 11.0%. Given this information, what must the market's projected growth rate be for Toys' stock (rounded)?

Select one:

a. 3.5%

b. 4.0%

c. 4.5%

d. 5.0%

e. 6.0%

Reference no: EM131179394

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