Calculate the expected growth rate


Question: Hahn Manufacturing is expected to pay a dividend of 1.00 dollar per share at the end of the year [D1 = $1.00]. The stock sells for $40 per share, & its required rate of return is 11 percent. The dividend is expected to grow at a constant rate, g, forever. Calculate Hahn's expected growth rate?

[A] 9.00%

[B] 9.50%

[C] 10.00%

[D] 8.00%

[E] 8.50%

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Finance Basics: Calculate the expected growth rate
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