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Suppose Powers Ltd. just issued a dividend of $1.20 per share on its common stock. The company paid dividends of $.85, $.92, $.99, and $1.09

Suppose Powers Ltd. just issued a dividend of $1.20 per share on its common stock. The company paid dividends of $.85, $.92, $.99, and $1.09 per share in the last four years.

Required:

If the stock currently sells for $53, what is your best estimate of the companys cost of equity capital using arithmetic and geometric growth rates?

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