The common stock of auto deliveries sells for $27.21 a share. the stock is expected to pay $1.80 per share next month when the annual dividend is distributed. auto deliveries has established a pattern of increasing its dividends by 4.6 percent annually and expects to continue doing so. what is the market rate of return on this stock?

Market rate of return on stock = 11.2152%

Explanation:

Details provided are

Market rate per share = $27.21

Dividend to be paid at year end = $1.80

Expected dividend growth rate = 4.6%

Expected return of market has to be calculated.

Using the dividend growth model we have,

Market return - growth =

Market return = 6.6152 + 4.6 = 11.2152%

Market rate of return on stock = 11.2152%

previous business sales - c.

answer; ///i believe that the correct answer is (a) it is the means by which a person earns money;