Consider the Gordon Growth Model for pricing equities and the formula for pricing discount bonds.

You hold a share that has the following information:

• Dividend: 2
• Required return: 5%

As well as a bond with the following information:

• Face value: 105
• Market interest rate: 5%
• Maturity: 1 year

At what growth rate for the share would you be indifferent between these two securities?

a. 4%

b. 5%

c. 7%.

d. 6%.