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Estimating the DCF Growth Rate [ LO 1 ] Suppose Stark, Ltd . , just issued a dividend of $ 2 . 5 1 per

Estimating the DCF Growth Rate [LO1] Suppose Stark, Ltd., just issued a dividend of $2.51 per share on its common stock. The company paid dividends of $2.01, $2.17, $2.25, and $2.36 per share in the last four years. If the stock currently sells for $43, what is your best estimate of the company's cost of equity capital using the arithmetic average growth rate in dividends? What if you use the geometric average growth rate?

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