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Sandhill Inc's common shares currently sell for $30 each. The firm's management believes that its shares should really sell for $40 each. If the firm

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Sandhill Inc's common shares currently sell for $30 each. The firm's management believes that its shares should really sell for $40 each. If the firm just paid an annual dividend of $2 per share and management expects those dividends to increase by 5 percent per year forever (and this is common knowledge to the market). Problem 13.20 a1-a2 (Solution Video)(a1) What is the current cost of common equity for the firm? (Round intermediate calculations and final answer to 2 decimal ploces, eg. 15.25%6) The current cost of common equity for the firm % eTextbook and Media Attempts: 1 of 3 used Problem 13.20 a1-a2 (Solution Video) (a2) What does management believe is the correct cost of common equity for the firm? (Round intermediate calculations and final answer to 2 decimal places, e.g. 15.25\%.)

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