Expected Return American Eagle Outfitters (AEO) recently paid a $.57 dividend. The dividend is expected to...

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Question

Expected Return American Eagle Outfitters (AEO) recently paid a $.57 dividend. The dividend is expected to...

Expected Return American Eagle Outfitters (AEO) recently paid a $.57 dividend. The dividend is expected to grow at a 17.40 percent rate. At the current stock price of $25.97, what is the return shareholders are expecting?

17.40%

19.98%

17.42%

19.72%

business accounting

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Answer 1

Answer #1

Dividend at the end of year 1

= 0.57 + 17.40%

= 0.66918

Expected rate of return =( 0.66918/25.97) + 17.4%

= 17.42%

Option C is the answer

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Answer 2

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Expected Return American Eagle Outfitters (AEO) recently paid a $.57 dividend. The dividend is expected to...

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Expected Return American Eagle Outfitters (AEO) recently paid a $.56 dividend. The dividend is expected to...

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