You Expect KT Industries (KTI)will Have Earnings Per Share of $3

Multiple Choice

You expect KT Industries (KTI) will have earnings per share of $3 this year and expect that they will pay out $1.50 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) 6.0%.
B) 7.5%.
C) 4.5%.
D) 3.0%.