The answer is 9.35%.
The required rate of return (RRR) is the minimal return an investor would accept for owning a company's shares in exchange for a certain amount of risk. In corporate finance, the RRR is used to assess the profitability of proposed investment projects.
The RRR is a subjective minimal rate of return; this implies that a retiree will have a lower risk tolerance and hence accept a lesser return than a fresh college graduate with a larger stomach for risk.
Required return=(D1/Current price)+Growth rate
=(1.87/37)+0.043
=0.0505405405+0.043
=9.35% (Approx)
Hence, the required rate of return is 9.35%.
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