Investors Require an After-Tax Rate of Return of 10% on Their

Investors require an after-tax rate of return of 10% on their stock investments.The tax rate on dividends is 28%, while capital gains escape taxation.A firm will pay $2 per share in dividends one year from now, after which the stock is expected to be at a price of $20.Determine the current stock price and the expected before tax rate of return for a one-year holding period.
$$\begin{array}{l}\begin{array} { | l | r | } \hline \text { DATA }\\\hline \text { Investor return } & 10 \% \\\hline \text { Dividend arnourt } & \$ 2.00 \\\hline \text { Tax rate } & 28 \% \\\hline \text { Future price prediction } & \$ 20.00 \\\hline\end{array}\end{array}$$