Light Construction Machinery Company has an expected ROE of 11%. The dividend growth rate will be _______ if the firm follows a policy of paying 25% of earnings in the form of dividends.
A. 3.0%
B. 4.8%
C. 8.25%
D. 9.0%
C. 8.25%
11% × 0.75 = 8.25%.
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