(2 of bond FIN 3030, Midterns2, F17. For questions7-12, Best Co. has 100 iis calculat divided by its current share price) 7. You believe Best Co. can hares outstanding currenthy selling for $40/share. ed as dividends paid in the last 12 months end According to the growth model how much is Best Co's cost of equity? grow dividends by 5% per year for perpetuity. 8.00% b. 8.15% c. 10.25% d. 12.30% e. 14.50% o) You believe Best Co. can grow its dividends by 5% per year for perpetuity. However, you think its cost of equity is 1 1%. How much are you willing to pay for its shares (choose the closest answer )? 8. naly a 126 b. 42 c 21 d. 20 e 18 hich sent Best Co. is expected to earn $2/share in earnings (net income) next year. You believe Best Co. can grow its dividends at 5% per year and its cost of equity is 9%, what level of dividends next year will justify a purchase of Best Co. stock at $40/share today? Mic 9. a. $1.20 b. $1.26 .$2.40 d. $2.52 e. None of the above 10, Best Co. Is expected to earn $2/share in earnings next year. If its payout ratio is 60% what is its expected sustainable constant growth rate in the future? a. 2.0% b. 2.5% c. 3.0% d. 3.5% e. None of the above