Walter utilities is a dividend-paying company and is expected to pay an annual divident of $0.85 at the end of the year. itts dividend is expected to grow at a constant rate of 9.00%p per year. if walter's stock currently trades for $18.00 per share, what is the expected rate of return?
a. 13.72%
b. 8.32 %
c.9,04%
d. 9.47%

rate of return  = 0.13722 = 13.72 %

so correct option is a. 13.72%

Explanation:

given data

annual divident = $0.85

constant rate = 9.00%

stock currently trades = $18.00 per share

to find out

expected rate of return

solution

we know that expected rate of return is express as here

rate of return  = + growth    ........................1

so put here value we get

rate of return  = + growth

rate of return  = + 9%

rate of return  = 0.047222 + 0.09

rate of return  = 0.13722 = 13.72 %

so correct option is a. 13.72%

$310 is less than or equal to $9 + $35x

Step-by-step explanation: