You expect KT industries​ (KTI) will have earnings per share of $ 4 this year and expect that they will pay out $ 1.00 of these earnings to shareholders in the form of a dividend. ​ KTI's return on new investments is 15​% and their equity cost of capital is 12​%. The expected growth rate for​ KTI's dividends is closest​ to: a: 6.8 b. 11.3 c.4.5 d. 9

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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You expect KT industries​ (KTI) will have earnings per share of $ 4 this year and expect that they will pay out $ 1.00 of these earnings to shareholders in the form of a dividend. ​ KTI's return on new investments is 15​% and their equity cost of capital is 12​%. The expected growth rate for​ KTI's dividends is closest​ to:

a: 6.8 b. 11.3 c.4.5 d. 9

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