Kwik Industries 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 it's 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? (Please show work)
A) 3.85%
B) 4.93%
C) 5.39%
D) 6.65%
E) 14.35%