McDonnell Manufacturing is expected to pay a dividend of $1.50 per share at the end of the

Question:

McDonnell Manufacturing is expected to pay a of $1.50 per share at the end of the year (D1 = $1.50). The stock sells for $34.50 per share, and its required rate of return is 11.5%. The is expected to grow at some constant rate, g, forever. What is the equilibrium expected growth rate?
a. 6.46%
b. 6.63%
c. 6.80%
d. 6.97%
e. 7.15%

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...