Answer:
Expected rate of return =7.1% (Approx.)
Step-by-step explanation:
Given:
Current stock price = $50
Divided d = $2
Growth rate g = 5 %
Find:
Expected rate of return
Computation:
Expected rate of return = D(1+g)/Current Price + g
Expected rate of return = [2(1+5%)/50] + 5%
Expected rate of return =7.1% (Approx.)
Step-by-step explanation:
answer is in photo above
The correct answer is letter B