Answer:
g = 16%
dividends yield:
Year 1 4.60%
Year 3: 4.78%
expected rate of return:
year 1 20.6%
year 3 20.78%
Explanation:
grow rate:
D1 /D0 = g
1.16/1.00 - 1 = 0.16
1.3456/1.16 - 1 = 0.16
the grow rate is 16%
dividend yield:
dividends/stock price = dividend yield
1/21.7 = 0,0460 = 4.60%
1.3456/28.15 = 0,04780 = 4.78%
expected rate of return:
dividend yield + grow rate
4.60% + 16% = 20.6%
4.78% + 16% = 20.78%