Beta , Inc. maintains a debt - equity ratio of 0.78 , has an equity cost of capital of 12 % , and a debt cost of capital of 7 % . Beta Inc's corporate tax rate is 38 % , and its equity market value is $ 258 million . If the firm's free cash flow is expected to be $ 11 million in one year and will grow at constant growth rate forever , what constant expected future growth rate in dividends is consistent with the firm's current market value of the equity ?