XYZ Corp. just paid a dividend today of $8.60 per share. The dividend is expected to grow at a constant rate of 2.8% per year. If XYZ Corp. stock is selling for $22.00 per share, what is the stockholders' expected rate of return? Submit your answer as a percentage and round to two decimal places.

To answer the question:

(1) Describe and interpret the assumptions related to the problem.

(2) Apply the appropriate mathematical model to solve the problem.

(3) Calculate the correct solution to the problem.