Mymid. Corp. has stock outstanding. If the stock is worth $50 and the stock is growing at 5.1%, then what should the annual dividend that was just paid be if the return on equity is 16.9% $5.90 $5.07 $5.33 $5.61

Poklekom5zc

Poklekom5zc

Answered question

2022-12-04

Mymid. Corp. has stock outstanding. If the stock is worth $50 and the stock is growing at 5.1%, then what should the annual dividend that was just paid be if the return on equity is 16.9%
a. $5.90
b. $5.07
c. $5.33
d. $5.61

Answer & Explanation

Clarence Terrell

Clarence Terrell

Beginner2022-12-05Added 13 answers

Price = recent dividend* (1 + growth rate )/(cost of equity - growth rate)
50 = Recent dividend × 1 + 0.051 0.169 0.051
Recent dividend = 5.61

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