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The common stock of Auto Deliveries sells for $28.16 a share. The stock is expected to pay $1.35 per share next year when the annual

The common stock of Auto Deliveries sells for $28.16 a share. The stock is expected to pay $1.35 per share next year when the annual dividend is distributed. The firm has established a pattern of increasing its dividends by 3% annually and expects to continue doing so. What is the required rate of return on this stock?

A.
7.42%

B.
7.79%

C.
19.67%

D.
20.14%

E.
20.86%

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