What is market rate of return on this stock

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Reference no: EM131874545

1. The common stock of Auto Deliveries sells for $27.71 a share. The stock is expected to pay $2.00 per share next month when the annual dividend is distributed. Auto Deliveries has established a pattern of increasing its dividends by 4.8 percent annually and expects to continue doing so. What is the market rate of return on this stock?

14.42 percent

7.22 percent

9.62 percent

16.82 percent

12.02 percent

2. Miller Brothers Hardware paid an annual dividend of $1.70 per share last month. Today, the company announced that future dividends will be increasing by 3.60 percent annually. If you require a 9.2 percent rate of return, how much are you willing to pay to purchase one share of this stock today?

$29.75

$48.92

$33.15

$47.22

$31.45

Reference no: EM131874545

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