Use the dividend growth model to determine the required rate of return for equity. Your firm anticipates paying a divdend of $2.25 per share next year, has a recent price of $40.20 per share, and anticipates a growth rate in dividends of 3.00% per year for the for see able future.
1. 8.44%
2. 8.60%
3. 8.76%
4. There is not enough information to answer this