Suppose Beta, Ltd., just issued a dividend of $2.10 per share on its common stock.

on its common stock. The Company HAS EXPECTED Dividends of $2.15, $2.34, $2.75, $3.15,

per share FOR THE NEXT four years.

If the stock currently sells for $56, what is your best estimate of the

companys cost of equity capital

What is the best estimate of the Beta Ltd.'s Cost of Equity

using the Geometric Average growth rate in dividends?

Ke based on Geometric Average =

15.82%

Ke based on Geometric Average =

16.82%

Ke based on Geometric Average =

1O.67%

Ke based on Geometric Average =

12.82%