Youâve dreaded it for a while, but now you feel prepared. In 30 minutes youâll have to terminate Tim, a 12-year employee who is
1 answer:
You might be interested in
Answer:
cost of equity = 9.68%
so correct option is d. 9.68%
Explanation:
given data
currently priced = $17.15
paid annual dividend = $1.22
dividends increasing = 2.4% annually
to find out
firm's cost of equity
solution
we get here cost of equity by apply price equation that is express as
Price = recent dividend × ( 1 + growth rate ) ÷ ( cost of equity - growth rate) .....................1
put here value we get
$17.15 =
solve it we get
cost of equity = 9.68%
so correct option is d. 9.68%