Question: EB Systems is selling for $ 11.40 and is expected to pay a $ 0.40 dividend next year. The dividend is expected to grow at

EB Systems is selling for $ 11.40 and is expected to pay a $ 0.40 dividend next year.

The dividend is expected to grow at 15 percent for the following four years, and then at 7 percent annually after Year 5. If purchased at its current price, what is the expected rate of return on EB Systems? Assume price equals value.

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