Examveda
Examveda

Constant growth rate is 8% and an expected dividend yield is 5.4% then expected rate of return would be

A. -3.40%

B. 3.40%

C. 13.40%

D. -13.40%

Answer: Option C

Solution(By Examveda Team)

Expected rate of return = Constant growth rate + Expected dividend yield
= 8% + 5.4% = 13.40%.

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