Question
Rebel Restaurant expects to pay a common stock dividend of $1.50 per share next year (d 1 ). Dividends are expected to grow at a
Rebel Restaurant expects to pay a common stock dividend of $1.50 per share next year (d1). Dividends are expected to grow at a 3% rate for the foreseeable future.
The restaurants common stock is selling for $18 per share and issuance costs are $3 per share.
What is the restaurant's cost of external equity?
Group of answer choices
a. 14.00%
b. 13.00%
c. 12.11%
d. 20.59%
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Financial Accounting Reporting And Analysis
Authors: Michael Diamond, James Stice, Earl K. Stice, James D. Stice
5th Edition
0538873019, 978-0538873017
