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Business, 12.12.2019 06:31 aiueo946

Aec company issues common stock that is expected to pay a dividend over the next year of $2 at a stock price of $20 per share today. if its wacc is 12% and the company is financed by 30% debt and 70% equity, calculate the expected growth rate of dividend (=g), given the cost of debt is 5% and tax rate is 0%?

a) 5.0%

b) 7.0%

c) 9.0%

d) 12.0%

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