Tannerly Worldwide's common stock is currently selling for $48 a share. If the expected dividend at the end of
the year is $2.40 and last year's dividend was $2.00, what is the rate of return implicit in the current stock price?
What will be an ideal response?
rc = 2.40/48 + (2.40 - 2.00)/2.00 = .05 + .20 = 25%
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