After graduation you are considering starting a combination sandwich, vinyl and tie-dye shop in Boulder. Total upfront cost will be $500,000 and all investors will be stockholders. After the first year, you believe that you will have $100,000 in profits available to pay to your stockholders. You also believe that profits paid to stockholders will grow at 5% a year forever after that. What rate of return can your stockholders expect to earn on their investment?

25.0%

20.0%

50.0%

55.0%

15.0%