Question

The expected return on Natter Corporation's stock is 14%. The stock's dividend is expected to grow at a constant rate of 8%, and it currently sells for $50 a share. Which of the following statements is CORRECT? Group of answer choices The stock's dividend yield is 8%. The stock's dividend yield is 7%. The stock price is expected to be $57 a share one year from now. The current dividend per share is $4.00. The stock price is expected to be $54 a share one year from now.

Answer 1

Answer: The stock price is expected to be $57 a share one year from now.

Explanation:

The stock price is expected to be $57 a share one year from now.

Expected return = 14%

current share price= $50

expected share price in a year from now = $50 x (1 + 0.14)

expected share price in a year from now = 57