You can add dividend yield to expected growth rate to get

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You buy a share of The Ludwig Corporation stock for $21.40. You expect it to pay dividends of $1.07, $1.1449, and $1.2250 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $26.22 at the end of 3 years.

a. Calculate the growth rate in dividends.

b. Calculate the expected dividend yield.

c. Assuming that the calculated growth rate is expected to continue, you can add the dividend yield to the expected growth rate to get the expected total rate of return. What is this stock's expected total rate of return?

Reference no: EM13478387

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