Johnson Enterprises's stock is currently selling for $45.50 per shite, and the firm expects its per share dividend to be 51 38 in one yoat. Analysts project the growth rate to be constant at 27 Estimating the cost of equity using the discounted cash flow (or dividend growth approach what is Johnson's cost of internal equity A-Z 10825 12.8% 0.04 10.30 Estimating growth rates It is oftendimu to estimate the expected future dividend growth rate for use in estimating the cost of existing equity using the DC DG approach In general, there are three available methods to generate such an estimate . Carry forward a historical realued growth rate, and apply it to the future Locate and apply an expected future growth rato prepared and published by security Use the retention growth model Suppose Johnson is currently hitting 70% of its warnings in the form of cash dividends. It has also historically generated an average return on equity (ROL) of Johnson's estimated growth rate