You buy a share of the Ludwig Corporation stock for $21.40. You expect it to pay dividends for $1.07, $1.1449, and $1.2250 in years 1, 2 and 3 respectively. And you expect to sell it at a price of $26.22 at the end of 3 years.

a.Calculate the growth rate in dividends.

b.Assuming that the calculated growth rate is expected to continue, you can add the dividend yields to the expected growth rate to obtain the expected total rate of return. What is the stock's expected total rate of return?