Find what rate of return are investors expecting

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Problem 1: Consider a stock that that is expected to pay a dividend of $2.73 a year from now. The dividend is expected to grow at a constant rate of 2.7% per year. The current price of the stock is $40.21. What rate of return are investors expecting? Enter your answer as a percentage. Do not include the percentage sign in your answer.

Reference no: EM132934309

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