单选题 If Heritage Company's current dividend per share is $1.00, its current market price is $ 25, and its growth rate is 8 percent, what is the implied rate of return on the company's stock?

A、

A. 8.0%.
B、

B. 12.0%.
C、

C. 12.3%.

【正确答案】 C

【答案解析】
Formula is k=(D₁/P0))+g=1.08/25+0.08=12.3%. where D₁=(1×1.08). Be careful of the word expected; since current dividend is given, one must multiply the dividend by 1 plus the growth rate.