Question 6 (7 points) Assume that the common stock of a popular local company sells for $18.75 a share (therefore, Po = $18.75). The stock is expected to pay $2.15 per share next year when the annual dividend to its shareholders is paid. This well known company has stable and predictable pattern of increasing its dividends by 2.5 percent annually and its CFO expects this pattern continue doing so therefore g 2.5%). Under the expectation assumption that its common stock behaves as a constant growth stock under the Gordon growth model, what is the market rate of return on this stock (that is, find r)? Market Rate of Return (or Required Rate of Return, r)