Question
Suppose Stark Ltd. just issued a dividend of $2.79 per share on its common stock. The company paid dividends of $2.30, $2.53, $2.60, and $2.71
Suppose Stark Ltd. just issued a dividend of $2.79 per share on its common stock. The company paid dividends of $2.30, $2.53, $2.60, and $2.71 per share in the last four years.
a.If the stock currently sells for $50, what is your best estimate of the company's cost of equity capital using the arithmetic average growth rate in dividends?(Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
a.What if you use the geometric average growth rate?(Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
a. Cost of Equity %:
b. Cost of Equity %:
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