FIN 370 Course Great Wisdom / tutorialrank.com FIN 370 Course Great Wisdom / tutorialrank.com | Page 25
Total firm value will not change.
Price-earnings ratio will be 12.55.
Retained earnings will increase by $ 462,000.
The common stock of Dayton Repair sells for $ 43.19 a share. The stock is expected to pay $ 2.28 per share next year when the annual dividend is distributed. The firm has established a pattern of increasing its dividends by 2.15 percent annually and expects to continue doing so. What is the market rate of return on this stock?
7.67 percent
7.59 percent
7.43 percent
7.14 percent
7.28 percent
Total firm value will not change.
Price-earnings ratio will be 12.55.
Retained earnings will increase by $ 462,000.
The common stock of Dayton Repair sells for $ 43.19 a share. The stock is expected to pay $ 2.28 per share next year when the annual dividend is distributed. The firm has established a pattern of increasing its dividends by 2.15 percent annually and expects to continue doing so. What is the market rate of return on this stock?