Question: If the dividends to be paid in one year on a common stock issue are $4.00 per share, the cost of equity is 15%, and

If the dividends to be paid in one year on a common stock issue are $4.00 per share, the cost of equity is 15%, and the current price of the common stock is $40, what is the assumed growth rate?

a. 5%

b. 25%

c. 7%

d. 8%

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Principles of Finance 6th edition by Scott Besley, Eugene F. Brigham