If you are willing to pay $62.72 for one share of the stock today, and you expect a dividend payment of $4.00, The rate of return do you require is 10%.
Using this formula to find the rate of return
Required rate of return =[ 1 - ( Sales price of shares + Dividend ) / Stock to day]
Let plug in the formula
Required rate of return =[ 1 - ( $65 +$4) / $62.72]
Required rate of return =[ 1 - ( $69/$62.72)]
Required rate of return =[ 1 - 1.10]
Required rate of return = 10%
Therefore the rate of return is 10%.
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