Walter Utilities is a dividend-paying company and is expected to pay an annual dividend of $1.65 at the end of the year. Its dividend is expected to grow at a constant rate of 9.50% per year. If Walters stock currently trades for $20.00 per share, what is the expected rate of return?

17.75%

10.37%

9.58%

12.05%

Walters dividend is expected to grow at a constant growth rate of 9.50% per year. What do you expect to happen to Walters expected dividend yield in the future?

It will increase.

It will stay the same.

It will decrease.