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C. AFYG Analytica wishes to determine its cost of common stock equity, rs. The market price, Po, of its common stock is GH50 per share.

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C. AFYG Analytica wishes to determine its cost of common stock equity, rs. The market price, Po, of its common stock is GH50 per share. The firm expects to pay a dividend, D1, of GH4 at the end of the coming year, 2013. The dividends paid on the outstanding stock over the past 6 years (2007-2012) were as follows: Year Dividend 2012 GH3.80 2011 3.62 2010 3.47 2009 3.33 2008 3.12 2007 2.97 i. 6 MARKS Calculate the annual rate that dividends have grown Determine the cost of common stock equity 2 MARKS

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