and its dividends are expected to grow at a constant rate Dorpac Corporation has a dividend...

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and its dividends are expected to grow at a constant rate Dorpac Corporation has a dividend yield of 1.5% Its equity cost of

What is the expected growth rate of Dorpacs share price? (Select the best choice below.) O A. With constant dividend growth,

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Answer 1

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Answer #1

a. Cost of capital = Dividend yield - Growth rate

8.5% = 1.5% - growth rate

Growth rate = 8.5% - 1.5%

g = 7.0%

b. D. With constant growth rate share price is expected to grow at rate g = 7.0%

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Answer 2

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