Assume that earnings and dividends are expected to grow at


Mexican Motors stock sells for 200 pesos per share and next year's dividend is 8.5 pesos. Security analysts are forecasting earnings growth of 7.5% per year for the next five years. Assume that earnings and dividends are expected to grow at 7.5% in perpetuity. What rate of return are investors expecting?

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Finance Basics: Assume that earnings and dividends are expected to grow at
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