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Mark paid $40 to purchase a share of XYZs stock. He expects to receive $$2 dividend per share from the company at the end of
Mark paid $40 to purchase a share of XYZs stock. He expects to receive $$2 dividend per share from the company at the end of the year. He expects that the companys earnings and dividends will grow in the long run at an average rate of 5% per year (i.e., his capital gains yield expectation on the stock is about 5% per year). What is Marks expected rate of return on XYZs stock?
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