Question $9(0\mathrm{.}5$ points$)$

Babo company has a dividend yield of $3\mathrm{.}50\%$ and the cost of equity capital $15\mathrm{.}50\%$

respsectivelly. If Babo's dividends will be expected to grow at a constant rate, what

should be the dividend growth rate of Babo?

Instructions: Round the result to two decimal places and do not put the $"\%"$ symbol

in the answer box. For example if you get a result of $18\mathrm{.}50\%$ then write $18\mathrm{.}50$ in the

answer box below.

Your Answer:

Answer