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A stock pays an annual dividend of $8.4 in one year time. The dividend is expected to increase by 7% per year (roughly the inflation
A stock pays an annual dividend of $8.4 in one year time. The dividend is expected to increase by 7% per year (roughly the inflation rate) forever. The price of the stock is $73 per share. At what cost of capital is this stock priced?
Select one:
a. The cost of capital is 18.51%
b. The cost of capital is 19.51%
c. The cost of capital is 17.51%
d. The cost of capital is 19.01%
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