Xyz companys common stock paid 250 in dividends last year, Ask an Expert

Finance

XYZ company's common stock paid $2.50 in dividends last year. Dividends are expected to grow at a 12-percent annual rate forever. If XYZ's current market price is $40.00, and your required rate of return is 18 percent, should you purchase the stock?

No, the percentage return on the stock is too high, thus it is too risky.

Yes, the stock is expected to return more than you require.

No, the stock is overvalued

Not enough information is given.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92401727

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