Question

Dry Dock Marina is expected to pay an annual dividend of $1.58 next year. The stock is selling for $18.53 a share and has a total return of 9.35 percent. What is the dividend growth rate? Multiple Choice

A).95%
B).82%
C)1.28%
D)1.03%
E).66%

Answer 1

The dividend growth rate is 0%

Step-by-step explanation:

To calculate the dividend growth rate, we need to use the formula:

Dividend Growth Rate = (Dividend Next Year - Dividend Current Year) / Dividend Current Year

From the given information, the dividend next year is $1.58, and the dividend growth rate is 9.35%. Using the formula, we can calculate:

Dividend Growth Rate = (1.58 - 1.58) / 1.58 = 0%

Therefore, the dividend growth rate is 0%.