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The common stock of Eddies Engines, Inc. sells for $21 a share. The stock is expected to pay $1.82 per share next month when the annual dividend is distributed. Eddies has established a pattern of increasing their dividends by 5 % annually and expects to continue doing so. What is the market rate of return on this stock? (Report answer in percentage terms and round to 2 decimal places. Do not round intermediate calculations)
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Answer #1

rate of return

=(next dividend/price)+g

=(1.82/21)+5%

=13.67%

the above is the answer

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