The current price of XYZ stock is $25 per share. If XYZs current dividend is $1 per share and investors required rate of return is 10 percent, what is the expected growth rate of dividends for XYZ, based on the constant growth dividend valuation model?

Select one:

a. 5.5%

b. 5.77%

c. 6.5%

d. 6%

Consider each of the following stocks, and solve for the missing element: S

Stock Current year's dividend Expected growth in dividends Required rate of return value of a share of stock

A $1.00 3% 5 % ---------

B 4% 6% $26.000 -------------- 4% 6% $26

C $1.00 10% -------------- $ 21

D $0.75 2% ---------------- $7.650

E $1.1 4% 10% -----------