Now we can try this by introducing constant growth in dividends. A. Dividend is $1.00 per year. Investors require a 10% return. Initially, it is thought there will be 0% dividend growth. B. Dividend is $1.00. Required return is still 10% but investors now expect the dividend will grow 2% per annum. C. Dividend is $1.00 per year. Market optimism drives the required retum down 108% while at the same time a new growth stralegy boosts the expected dividend growth rate to 6%