Use the dividend growth model to determine the required rate of return for equity. Your firm intends to pay a dividend of $1.50 per share one year from today

Further, the recent stock price is $31.82 per share, and you anticipate a growth rate in dividends of 4.00% per year for the foreseeable future.
A) 8.90%
B) 8.71%
C) 9.09%
D) There is not enough information to answer this question.

Answer: B
Explanation: B) Re = + g = Re = + 0.04 = 8.71%.