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The common stock of Tasty Treats is valued at $10.80 a share. The company increases its...

The common stock of Tasty Treats is valued at $10.80 a share. The company increases its dividend by 7 percent annually and expects its next dividend to be $0.20 per share. What is the total rate of return on this stock?

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Expert Solution

Dividend yield=Dividend for next year/Current price

=(0.2/10.8)

=1.85%(Approx)

Total rate of return=Dividend yield+Capital gains yield

=1.85+7

=8.85%(Approx)

jeff jeffy answered 2 years ago
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