The current market price of a company’s share is Rs. 90 and the expected dividend per share next year is Rs. 4.50. If the dividends are expected to grow at a constant rate of 8%, the shareholders required rate of return is:

Correct option is C

To calculate the shareholders' required rate of return, we can use the Gordon Growth Model, also known as the Dividend Discount Model. The formula for the required rate of return (k) is as follows:
k = (Dividend per Share / Current Market Price) + Growth Rate
Given:
Dividend per Share = Rs. 4.50
Current Market Price = Rs. 90
Growth Rate = 8% or 0.08
Plugging in these values into the formula, we get:
k = (4.50 / 90) + 0.08
k = 0.05 + 0.08
k = 0.13 or 13%
Therefore, the shareholders' required rate of return is 13%.