Franklin Corporation Is Expected to Pay a Dividend of $1

Multiple Choice

Franklin Corporation is expected to pay a dividend of $1.25 per share at the end of the year (D1 = $1.25) . The stock sells for $32.50 per share, and its required rate of return is 10.5%. The dividend is expected to grow at some constant rate, g, forever. What is the equilibrium expected growth rate?

A) 6.01%
B) 6.17%
C) 6.33%
D) 6.49%
E) 6.65%