Storico Co. just paid a dividend of $3.5 per share. The company will increase its dividend by

Question:

Storico Co. just paid a dividend of $3.5 per share. The company will increase its dividend by 12 percent next year and will then reduce its dividend growth rate by 3 percentage points per year until it reaches the industry average of 3 percent dividend growth, after which the company will keep a constant growth rate, forever. If a share of Storico stock sells for $51.02 today, the required return on Storico stock is _____ percent.

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...