Answer:
4%
Step-by-step explanation:
The dividend growth rate is the percentage rate of growth that a stock's dividend experiences over a period of time. The dividend discount model is based on an assumption that a stock is worth the sum of its future payments to shareholders, discounted back to the present day. It is calculated using the formula P = D1 / (r - g) where P is the stock price, D1 is the dividend to be paid out the following year, r is the shareholders required return and g is the dividend growth rate. We can rearrange the formula to get g = r - D1/P
therefore g = 11.4% - $5.05/$69 = 0.04 = 4%