Answer:
13.47 percent
Explanation:
Southern Market recently paid an annual dividend of $2.62 and the dividend increases at an average rate of 3.8 percent.
To find out the expected dividend to be paid be Southern Market next year.
= [$2.62(1.038)]
= $2.71956
Market Rate of Return is calculated by the following formula,
R = [tex]\frac{expected dividend next year}{current share price} + growth rate for dividend[/tex]
R = 2.71956/28.12 + .038
R = .1347, or 13.47%
