Question: D.) equal to one E.) equal to the market beta 10. XYZ Inc. has a weighted average cost of capital of 11.5 percent. Its target

 D.) equal to one E.) equal to the market beta 10.

D.) equal to one E.) equal to the market beta 10. XYZ Inc. has a weighted average cost of capital of 11.5 percent. Its target capital structure is 55 percent common equity and 45 percent debt (the firm has no preferred stock). The before-tax cost of debt is 9 percent and the company's tax rate is 30 percent. If the expected dividend next period (D) is $5 and the current stock price is $45, what is the stock's dividend growth rate? A.) 2.68% B.) 3.44% C.) 4.64% D.) 5.83% E.) 6.75%

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