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Question: 11 the common stock of auto deliveries sells for 25...

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11. The common stock of Auto Deliveries sells for $25 a share. The stock is

expected to pay $1.10 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 dividend yield? What is the market rate of

return on this stock?

Dividend yield =4.4%

Market rate of return = 7.4%

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