(Growth rate in stock dividends and the cost of equity) In March of this past year, Manchester Eloctio (an olectrical supply company operating throughout the noutheastern United States and a publicly held company) was evaluating the cost of equity capital for the firin. The firmis shares are seding tor $50. 33 a share, a expects to pay an annual cash dividend of $2.75 a share noxd year, and the firm's investors anticipate an annual rate of return of 17 the a. If the firm is expected to provide a constant annual rate of growth in dividenda, what rate of growth must the firm experience? b. If the risk-free rate of interest is 3% and the market risk premium is 4%. What must the firm's bela be to warrant an expocted rate of return 17% an the fimis stock? a. The constant annual rate of growth in dividends is \%. (Round to two decimal places,) b. The firmis beta is (Round to one decirnal place.) (Growth rate in stock dividends and the cost of equity) In March of this past year, Manchester Electric (an electrical supply company operating trroughout me southeastern United States and a publicly held company) was evaluating the cost of equity capital for the firm. The fimis shares are selling for $50.33 a share, if expects to pay an annual cash dividend of $2.75 a share next year, and the firm's investors anticipate an annual rate of retum of 179 s. a. If the firm is expected to provide a constant annual rate of growth in dividends, what rate of growth must the firm experience? b. If the risk-free rate of interest is 3% and the market risk premium is 4%, what must the firm's beta be to warrant an expected ra'e of retum 17% on the firm's stock a. The constant annual rate of growth in dividends is \%. (Round to two decimal places.) b. The firm's beta is (Round to one decimal place.) (Growth rate in stock dividends and the cost of equity) In March of this past year, Manchester Eloctio (an olectrical supply company operating throughout the noutheastern United States and a publicly held company) was evaluating the cost of equity capital for the firin. The firmis shares are seding tor $50. 33 a share, a expects to pay an annual cash dividend of $2.75 a share noxd year, and the firm's investors anticipate an annual rate of return of 17 the a. If the firm is expected to provide a constant annual rate of growth in dividenda, what rate of growth must the firm experience? b. If the risk-free rate of interest is 3% and the market risk premium is 4%. What must the firm's bela be to warrant an expocted rate of return 17% an the fimis stock? a. The constant annual rate of growth in dividends is \%. (Round to two decimal places,) b. The firmis beta is (Round to one decirnal place.) (Growth rate in stock dividends and the cost of equity) In March of this past year, Manchester Electric (an electrical supply company operating trroughout me southeastern United States and a publicly held company) was evaluating the cost of equity capital for the firm. The fimis shares are selling for $50.33 a share, if expects to pay an annual cash dividend of $2.75 a share next year, and the firm's investors anticipate an annual rate of retum of 179 s. a. If the firm is expected to provide a constant annual rate of growth in dividends, what rate of growth must the firm experience? b. If the risk-free rate of interest is 3% and the market risk premium is 4%, what must the firm's beta be to warrant an expected ra'e of retum 17% on the firm's stock a. The constant annual rate of growth in dividends is \%. (Round to two decimal places.) b. The firm's beta is (Round to one decimal place.)
