0

10. Runtan Inc. has just paid an annual dividend of $0.45 per share. Analysts expect the firm's dividends to grow by 2% forever. Its stock price is $35.7 and its beta is 1.4 The risk-free rate is 2% and the expected return on the market portfolio is 8%. a. What is the best guess for the cost of equity? 11. Tesla is expected to pay an annual dividend of $2.38 one year from now. Dividends are expected to grow by 3.4% every year and the current stock price is $1817. Tesla is in the process of issuing new common stock, with flotation costs of 4% of the issue price a. What is the cost of new common stock