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Investors expect the following series of dividends from a particular

Investors expect the following series of dividends from a particular common stock:

Year 1 ...... $1.10

Year 2 ......$1.25

Year 3 ......$1.45

Year 4 ......$1.60

Year 5 ......$1.75

After the fifth year, dividends will grow at a constant rate. If the required rate of return on this stock is 9 % and the current market price is $45.64, what is the long-term rate of dividend growth expected by the market?

Year 1 ...... $1.10

Year 2 ......$1.25

Year 3 ......$1.45

Year 4 ......$1.60

Year 5 ......$1.75

After the fifth year, dividends will grow at a constant rate. If the required rate of return on this stock is 9 % and the current market price is $45.64, what is the long-term rate of dividend growth expected by the market?

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