Question 18 A share is trading at R606,82 per share. It is expected to have a year-end dividend of R8,50 per share and to grow at some constant rate throughout time. The share’s required rate of...

Question 18

A share is trading at R606,82 per share. It is expected to have a year-end dividend of R8,50 per share and to grow at some constant rate throughout time. The share’s required rate of return is 11% (assume that the market is in equilibrium with the required return equal to the expected return). What is your forecast of the constant growth rate?

1. 2,29%

2. 6,59%

3. 9,60%

4. 12,23%