Determining the market rate of return


Problem:

An issue of common stock's most recent dividend is $1.75. Its growth rate is 5.7%.

Required:

Question: What is its price if the market's rate of return is 7.7%?

A. $24.63

B. $87.50

C. $92.50

D. None of these

Note: Please show the work not just the answer.

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Accounting Basics: Determining the market rate of return
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