Will Co. is expected to pay a dividend of $2 per share at th…
Will Co. is expected to pay a dividend of $2 per share at the end of year 1, and the dividends are expected to grow at a constant rate of 4 percent forever. If the current price of the stock is $20 per share, calculate the required rate of return for this stock (the cost of equity for the firm). You can use the following growing perpetuity formula to solve this problem.