Question
Shamas Famous Restaurants expects to pay a common stock dividend of $1.50 per share next year (d1). Dividends are expected to grow at a 4%
Shamas Famous Restaurants expects to pay a common stock dividend of $1.50 per share next year (d1). Dividends are expected to grow at a 4% rate for the foreseeable future. Shamas common stock is selling for $18.50 per share and issuance costs are $3.50 per share. What is Shamas cost of internal equity?
| A. 20.59% | |
| B. 12.11% | |
| C. 14.00% | |
| D. 10.00% |
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Corporate Finance A Focused Approach
Authors: Michael C. Ehrhardt, Eugene F. Brigham
8th Edition
0357714636, 9780357714638
