Estimating the DCF Growth Rate Suppose Found Ltd issued a dividend of 1.43 per share on its

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Estimating the DCF Growth Rate Suppose Found Ltd issued a dividend of £1.43 per share on its equity. The company paid dividends of £1.05, £1.12, £1.19 and £1.30 per share in the last 4 years. If the equity currently sells for £45, what is your best estimate of the company’s cost of equity capital using the arithmetic average growth rate in dividends? What if you use the geometric average growth rate?

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