Mexican motors stock sells for 200 pesos per share and next, Ask an Expert

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Mexican Motors stock sells for 200 pesos per share and next year's dividend is 8.5 pesos. Security analysts are forecasting earnings growth of 7.5% per year for the next five years. Assume that earnings and dividends are expected to grow at 7.5% in perpetuity. What rate of return are investors expecting?

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