Question
Suppose Stark Ltd. just issued a dividend of $1.96 per share on its common stock. The company paid dividends of $1.60, $1.70, $1.77, and $1.88
Suppose Stark Ltd. just issued a dividend of $1.96 per share on its common stock. The company paid dividends of $1.60, $1.70, $1.77, and $1.88 per share in the last four years.
If the stock currently sells for $70, what is your best estimate of the companys cost of equity capital using the arithmetic average growth rate in dividends?
What if you use the geometric average growth rate?
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Financial Management For Decision Makers
Authors: Peter Atrill
8th Edition
129213433X, 978-1292134338
