Gowth Rates?

Question

The stock price of Retro Co. is $65. Investors require a 12 percent rate of return on similar stocks. If the company plans to pay a dividend of $3.80 next year, what growth rate is expected for the company's stock price?

I know the answer is either 7.3% or 4.59% but I dunno how to set up the equation to get that. Or if I can use a TI-83 to assist.

Answer 1

How bout 6.2%

3.80 / $65 = 5.8% return on the Divids.

If 12% is required, the 12% - 5.8% = 6.2% growth rate is expected.

5.8% + 6.2% = 12% return in total.