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A firm has a current price of $30 a share, an expected growth rate of 12 percent and expected dividend per share (D1) of $1.

A firm has a current price of $30 a share, an expected growth rate of 12 percent and expected dividend per share (D1) of $1. Given its risk you have a required rate of return for it of 12 percent. Assuming that you expect the stock price to increase to $35 during the investment period, your expected rate of return and decision would be:

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