Determine expected rate of return of stockholders


Butler Corp paid a dividend today of $5 per share. The dividend is expected to grow at a constant rate of 6.5% per year. If Butler Corp stock is selling for $50.00 per share, the stockholders' expected rate of return is:

1. 11.50%.
2. 13.56%.
3. 15.49%.
4. 16.50%.

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Finance Basics: Determine expected rate of return of stockholders
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