The next dividend payment by Carroll, Inc. will be $1.90 per share. The dividendsare anticipated to maintaina 5.5 percent prowth rate, forever. If the stock currently sells for $47.00 per share, what is the required return?

Use the Gordon-Shapiro model...



... where P is the current stock price; is the expected dividend one period away; g is the expected constant dividend growth rate, and r is the required return (aka market cap rate). In your case you'll solve for r.