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Question: Suppose you had to determine r, the cost of equity, based on the following information. Assume the last dividend paid was $1.70. Dividends grow
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Suppose you had to determine r, the cost of equity, based on the following information. Assume the last dividend paid was $1.70. Dividends grow at a constant rate of 5% per year. Current Stock Price is $40.00. What is the cost of equity?
Last Dividend paid: $2.70
Grow rate: 5% = 0.05
Current price: $40.00
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