The Common Stock of Eddie's Engines,Inc

Multiple Choice

The common stock of Eddie's Engines,Inc. sells for $20 a share. The stock is expected to pay $2 per share next month when the annual dividend is distributed. Eddie's has established a pattern of increasing its dividends by 4% annually and expects to continue doing so. What is the market rate of return on this stock?

A) 14%
B) 14.4%
C) 15%
D) 17%
E) 19%