13.21 Cost of common stock: Underestimated Inc.'s common shares cu share. The firm believes that its shares should really sell for $54 per paid an annual dividend of $2 per share and the firm expects those by 8 percent per year forever (and this is common knowledge to the current cost of common equity for the firm and what does the firm be appropriate cost of common equity for the firm? Current stock price Firm's expected stock price Dividend just paid (D) Constant growth rate Current cost of common equity Appropriate cost of equity (as per firm's belief) $36 $54 $2 8%