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Suppose you know a company's stock currently sells for $100 per share and the required return on the stock is 10 percent.
1. Suppose you know a company's stock currently sells for $100 per share and the required return on the stock is 10 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield.
Required:If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share?
A. $4.76
B. $5.00
C. $9.52
D. $4.52
E. $5.05