What is the expected rate of return for a stock with a current market price of $35,

What is the expected rate of return for a stock with a current market price of $35, if the expected dividend at the conclusion of this year is $1.75, and earnings are growing at a 10% annual rate? (Assume that the dividends are anticipated to grow at the same rate.)
a. 25%
b. 15%
c. 10%
d. 5%

Solution