Question

Rampart Corporation has a dividend yield of 1.8 %. Its equity cost of capital is 8.8...

Rampart Corporation has a dividend yield of 1.8 %. Its equity cost of capital is 8.8 %​, and its dividends are expected to grow at a constant rate.

a. The growth rate will be nothing​%. ​(Round to one decimal​ place.)

b. What is the expected growth rate of​ Rampart's share​ price? ​(Select the best choice​ below.)

A. With constant dividend​ growth, share price is also expected to grow at rate g = 1.8 %.

B. With constant dividend​ growth, share price is also expected to grow at rate g = 7.0 %.

C. With constant dividend​ growth, share price is also expected to grow at rate g = 8.8 %.

D. With constant dividend​ growth, share price is also expected to grow at rate g =7.0 % -1.8 % =5.2 %.

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