Use the information about Company X below to help answer this question:

Next year the company will pay a dividend of $20 per share (DPS1 =20)

The company's current market cap is $1,000M

The company's has $5M shares outstanding

The company's capital gain yield is 5%

The required (total) return is closest to:

HINT: Rearrange the DDM for constant growth to calculate Re

a) 7.0% b) 7.5% c) 10.0% d) 12.5% e) 15.0%