Franklin Corporation is expected to pay a dividend of $1.25 per share at the end of the year (D₁ = $1.25). The stock sells for $30.00 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?

Select the correct answer.

a. 6.00%

b. 6.33%

c. 6.99%

d. 7.32%

e. 6.66%