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Question
Candy Apple Cakes' stock has a current market value of $40.50. The company just paid a dividend equal to $1.50 per share, which is expected to grow at a constant rate forever into the future. If Candy Apple's marginal investors require a rate of return equal to 12 percent, what is the rate at which dividends are expected to grow in the future?
a. 8.3%
b. 12.0%
c. 4.0%
d. 8.0%
e. There is not enough information to answer this question.
Answer
This answer is hidden. It contains 11 characters.
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