The Absolute Zero Co. just issued a dividend of $3.20 per share on its common stock. The company is expected to maintain a constant 6.6 percent growth rate in its dividends indefinitely. If the stock sells for $64 a share, what is the company's cost of equity?

The Absolute Zero Co. just issued a dividend of $3.20 per share on its common stock. The company is expected to maintain a constant 6.6 percent growth rate in its dividends indefinitely. If the stock sells for $64 a share, what is the company's cost of equity?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter11: Determining The Cost Of Capital

Section: Chapter Questions

Problem 13P: The Cost of Equity and Flotation Costs Messman Manufacturing will issue common stock to the public...

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