Unformatted text preview: 35. Assume that Duke paid a $0.42 annual dividend in the previous period. What is the dividend growth rate based on this quote? A) 4.3% B) 1.0% C) 2.2% D) 3.2% E) 4.4% Answer: D : Response: g = ($1.00 / 0.42) - 1 = 3.2% 31. You believe that the required return on Duke stock is 11% and that the expected dividend growth rate is 12%, which is expected to remain constant for the foreseeable future. Is the stock currently overvalued, undervalued, or fairly priced? A) Overvalued B) Undervalued C) Fairly priced D) Cannot tell without more information Answer: A Response: P = [$1.00 (1.12) ] / (.11 - .12) = $23.00; overvalued at $30.20 in the market...
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- Winter '13
- Dividend yield, Duke, dividend growth rate