The Drogon Co. just issued a dividend of $2.46 per share on its common stock. The company is expected to maintain a constant 5 percent growth rate in its dividends indefinitely. If the stock sells for $60 a share, what is the company's cost of equity?

rev: 09_20_2012

Multiple Choice

• 9.1%

• 8.84%

• 4.39%

• 9.77%

• 9.31%