Problem:
The common stock of Nickel and Dime, Inc. is selling for $25.53 a share. Dividends are expected to grow at a constant rate of 2.9 percent per year.
Required:
Question: What is the required rate of the return (in percents) for the investors of the firm if the company just paid an annual dividend of $2.22 a share next year?
Note: Please provide through step by step calculations.