AMETEK, manufactures and sells electronic instruments and electromechanical devices in North America, Europe, Asia, and South America. The dividend data for 2005 - 2011 is given below. The stock price was $42.86 at the end of 2011 and $18.19 at the end of 2005. Estimate the cost of equity for AMETEK at the end of 2011 using the Gordon formula. The dividends and stock prices are adjusted for stock splits.

Assume the future dividend growth rate is equal to the historical average between 2005 and 2011

AMETEK (AME) Year Dividend* Stock Price* 2011 $0.1600 $42.86 2010 $0.0800 2009 $0.0711 2008 $0.0711 2007 $0.0711 2006 $0.0415 2005 $0.0316 $18.19 *adjusted for cummulative stock splits Answer: k_e=