Gray 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 $22.50 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?

Select one:

a. 5.88%

b. 4.25%

c. 4.30%

d. 4.90%

e. 4.94%

using excel please