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4. Ormstown Orchid Company has common stock outstanding that has a current price of $20 per share and a $0.50 dividend. OOC's dividends are expected
4. Ormstown Orchid Company has common stock outstanding that has a current price of $20 per share and a $0.50 dividend. OOC's dividends are expected to grow at a rate of 3% per year. forever. The expected risk-free rate of interest is 2.5%, whereas the expected market premium is 5%. The beta on OOC's stock is 1.2. What is the cost of equity for OOC using the dividend valuation model? (4 Points)
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