Calculate stockholders expected rate of return


Question: Butler Corp paid a dividend today of $3.50/share. The dividend is expected to grow at a constant rate of 8% per year. If Butler Corp stock is selling for $75.60/share,  calculate the stockholders’ expected rate of return.

[A] 13.00%

[B] 14.38%

[C] 12.63%

[D] 12.53%

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Finance Basics: Calculate stockholders expected rate of return
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