What is equilibrium expected growth rate

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Reference no: EM131563419

Garth Manufacturing is expected to pay a dividend of 1.25 per share at the end of the year (D1 = $1.25). The stock sells for $21.50 per share, and its required rate of return is 10.5%. The dividend is expected to grow at some constant rate, g, forever. What is the equilibrium expected growth rate?

a. 4.87%

b. 4.73%

c. 5.34%

d. 5.48%

e. 4.69%

Reference no: EM131563419

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