Calculate expected rate of return based on the purchase price of a stock with the given information:

Purchased price: $120.00

Intrinsic Value: $127.85

Long Term Rate: 8%

Required rate of return: 10%

Dividend history: Yr 1=$2 (present value of 1.818), Yr 2=$2.50 (present value of 2.066), Yr 3=$3 (present value of 2.254)

(I am getting 6.5%, but I think this may be incorrect as I have found two ways to solve.)