Answer:
the growth rate is 5.47%
Step-by-step explanation:
The computation of the constant growth rate is shown below;
Current price = Dividend × (1 + growth rate) ÷ (required rate of return - growth rate)
$56 = $4 × (1 + growth rate) ÷ (13% - growth rate)
(1 + growth rate) ÷ (13% - growth rate) = 14
1 + growth rate = 1.82 - 14 × (growth rate)
So, the growth rate is
= 0.82 ÷ 15
= 5.47%
Hence, the growth rate is 5.47%