Homework Help: Finance

Posted by jessica on Wednesday, November 18, 2009 at 12:28pm.

ABC common stock paid $2.50 in divedends last year. Divedends are expected to grow at a 12% aanual rate forever. If ABC current market price is $40.00, what is the stock's expected rate of return(nearest .01%)?

I come up with 18.25%, am I correct?

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