q. Now assume that the stock is currently selling at $30.29. What is its expected rate of return? lets take WACC-13% last dividend DO 2 growth rate-6% Dividend next year-D1-D0(1+9-20+6%)-212 Stock price D1/WACC-g 2.12/(0.13-0.06) 30.29 2) dividend in that year D2 D1(1+g) 2.12(1+0.06) 2.2472 stock price D2/(WACC-g)- 2.2472/(0.13-0.06) 3210 3) Dividend yeild-annual dividend/stock price-2.12/30.29-7% capital gains yeild-(32.1-30.29/30.29-6% total return-dividend yield + capital gains yield-13%