(Answered) Rate of return do investors expect to receive

Finance

Problem: IBIS Corporation has had dividends grow from $2.50 per share to $6.50 per share over the last 10 years(the $6.50 per share dividend was paid yesterday; that is, D0= $6.50). This compounded annual growth rate in dividends is expected to continue into the future forever.

Required:

Question: If the current market price of IBIS's stock is $45.00 per share, what rate of return do investors expect to receive from buying IBIS stock? Support your statements with examples.

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