### Expected and Actual Rates of Return on Stock

Expected and Required Returns, Equation 9.2 (page 399) k=D1 + (P1 - P0)/P0 The Duncan Company's stock is currently selling for $ 15. People generally expect its price to rise to $ 18 by the end of next year. They also expect that it will pay a dividend of $. 50 per share during the year. (Hint: Apply Equation 9.2 page 399).