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What is the market requiring as return on this company stock

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Reference no: EM133025508

Question - The common stock of Average Corporation is selling for $10 a share and is expected to pay a dividend of $0.50 a share next year. If dividends are expected to grow at a constant rate of 4% indefinitely, what is the market requiring as a return on this company's stock?

A. 1.4%

B. 4.0%

C. 5.0%

D. 9.0%

Reference no: EM133025508

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