The Drogon 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? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Cost of equity %
The Drogon 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? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Cost of equity %
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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![**Cost of Equity Calculation**
**Problem Statement:**
The Drogon 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.
**Question:**
If the stock sells for $64 a share, what is the company’s cost of equity?
*[Important Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16]*
**Input Box:**
Cost of equity: [ ] %](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4075dd7b-7cf0-4080-a9ab-c20ff4793850%2Fc60fbc7b-1d34-4e5d-bf1e-d9b689af6ffd%2Fx93jj30b_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**Cost of Equity Calculation**
**Problem Statement:**
The Drogon 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.
**Question:**
If the stock sells for $64 a share, what is the company’s cost of equity?
*[Important Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16]*
**Input Box:**
Cost of equity: [ ] %
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