The Common Stock of Auto Deliveries Sells for $28

question 83

Multiple Choice

The common stock of Auto Deliveries sells for $28.16 a share.The stock is expected to pay $1.35 per share next year when the annual dividend is distributed.The firm has established a pattern of increasing its dividends by 3 percent annually and expects to continue doing so.What is the market rate of return on this stock?

• A)7.42 percent
• B)7.79 percent
• C)19.67 percent
• D)20.14 percent
• E)20.86 percent

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