LENGE 13. Expected Return, Dividends, and Taxes [LO2] The Gecko 13-16) a ordonfthath 13 per- Gordon Company are two firms whose business risk have dif- ferent dividend policies. Gecko pays no dividend, whereas dividend yield of 3.5 percent. Sup income tax rate is 35 percent. Gecko has an expected is the same but an expected Gordon has pose the capital gains tax rate is zero, whereas the earnings growth rate of expected returns on the two stocks are equal (because they are in the same risk cent annually, and its stock price is expected to grow at this same rate. If the aftertax what is the pretax required return on Gordon's stock? umoeted af market im