suppose wacken, limited, just issued a dividend of $2.73 per share on its common stock. the company paid dividends of $2.31, $2.39, $2.48, and $2.58 per share in the last four years. a. if the stock currently sells for $43, 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.) b. what if you use the geometric average growth rate?

suppose wacken, limited, just issued a dividend of $2.73 per share on its common stock. the company paid dividends of $2.31, $2.39, $2.48, and $2.58 per share in the last four years. a. if the stock currently sells for $43, 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.) b. what if you use the geometric average growth rate?

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 2MAD

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