The common stock of AD Mart sells for $28.16 a share. The stock is expected to pay $1 per share next year when the annual dividend is distributed. The firm has established a pattern of increasing its dividends by 5 percent annually and expects to continue doing so. What is the market rate of return on this stock?

8.73 percent 7.86 percent 31.25 percent 14.81 percent 11.44 percent