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Examveda

An expected dividend yield is 5.5% and expected rate of return is 11.5% then constant growth rate would be

A. 2.09%

B. -6.00%

C. 17.50%

D. 6.00%

Answer: Option D

Solution(By Examveda Team)

Constant growth rate = Expected rate of return - Expected dividend yield
= 11.5% - 5.5% = 6.00%

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