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What is the expected rate of return on the stock

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Reference no: EM132787220

Steady As She Goes Inc. will pay a year-end dividend of $3.20 per share. Investors expect the dividend to grow at a rate of 6% indefinitely.

Problem a. If the stock currently sells for $32.00 per share, what is the expected rate of return on the stock? (Do not round intermediate calculations. Enter your answer as a whole percent.)

Problem b. If the expected rate of return on the stock is 18.50%, what is the stock price? (Do not round intermediate calculations. Enter your answers rounded to 2 decimal places.)

Reference no: EM132787220

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