A firm pays a current dividend of $ 1 which is expected to grow at a rate

Question:

A firm pays a current dividend of $ 1 which is expected to grow at a rate of 5 percent indefinitely. If current value of the firm’s shares is $ 35, what is the required return applicable to the investment based on the constant- growth dividend discount model (DDM)?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...