Use the dividend growth model to determine the required rate of return for equity. Your firm recently paid a dividend of $2.25 per share, has a recent price of $40.20 per share, and anticipates a growth rate in dividends of 3.00% per year for the foreseeable future.

Select one:

a.

8.76%

b.

8.60%

c.

8.44%

d.

There is not enough information to answer this question.