Calculating Stock Expected Rate Of Return 548778

H. J. Corp. common stock paid $2.50 in dividends last year (DO). Dividends are expected to grow at a 12-percent annual rate forever. If H. J.’s current market price is $40.00, what is the stock’s expected rate of return (nearest .01 percent)?

a.5.50%

b.18.25%

c.19.00%

d.11.00%