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What is the stock expected rate of return

Question: The common stock of KPD paid $1 in dividends last year. Dividends are expected to grow at an 8 percent annual rate for an indefinite number of years.

a. If KPD's current market price is $25, what is the stock's expected rate of return?

b. If your required rate of return is 11 percent, what is the value of the stock for you?

c. Should you make the investment?

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Finance Basics: What is the stock expected rate of return

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