Problem:
Fris B. Corporation stock is currently selling for $42.86. It is expected to pay a dividend of $3.00 at the end of the year. Dividends are expected to grow at a constant rate of 3% indefinitely.
Required:
Question: Compute the required rate of return on FBC stock.
Choose one:
1. 10%
2. 33%
3. 7%
4. 4.3%
Note: Please provide full description.