Problem:
Gremlin Industries will pay a dividend of $1.80 per share this year. It is expected that this dividend will grow by 4% per year each year in the future. The current price of Gremlin's stock is $22.40 per share.
Required:
Question: What is Gremlin's equity cost of capital?
A) 11%
B) 12%
C) 14%
D) 18%
Note: Please show guided help with steps and answer.