Tyler Enterprises's stock is currently selling for $45.56 per share, and the firm expects its per-share dividend to be $2.35 in one year. Analysts projectthe firm's growth rate to be constant at 7.27%. Estimating the cost of equity using the discounted cash flow (or dividend growth) approach, what isTyler's cost of internal equity?O 12.43%15.54%O 11.81%13.05%Estimating growth ratesIt is often difficult to estimate the expected future dividend growth rate for use in estimating the cost of existing equity using the DCF or DG approach.In general, there are three available methods to generate such an estimate:• Carry forward a historical realized growth rate, and apply it to the future.• Locate and apply an expected future growth rate prepared and published by security analysts.• Use the retention growth model.Suppose Tyler is currently distributing 70% of its earnings in the form of cash dividends. It has also historically generated an average return on equity(ROE) of 8%. Tyler's estimated growth rate is%.

Cost of equity refers to the return that is earned by investing in the company as per the holdings…

Tyler Enterprises's stock is currently selling for $45.56 per share, and the firm expects its per-share dividend to be $2.35 in one year. Ana the firm's growth rate to be constant at 7.27%. Estimating the cost of equity using the discounted cash flow (or dividend growth) approac Tyler's cost of internal equity? O 12.43% O 15.54% 11.81% 13.05% Estimating growth rates It is often difficult to estimate the expected future dividend growth rate for use in estimating the cost of existing equity using the DCF or In general, there are three available methods to generate such an estimate:

Tyler Enterprises's stock is currently selling for $45.56 per share, and the firm expects its per-share dividend to be $2.35 in one year. Ana the firm's growth rate to be constant at 7.27%. Estimating the cost of equity using the discounted cash flow (or dividend growth) approac Tyler's cost of internal equity? O 12.43% O 15.54% 11.81% 13.05% Estimating growth rates It is often difficult to estimate the expected future dividend growth rate for use in estimating the cost of existing equity using the DCF or In general, there are three available methods to generate such an estimate:

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 10P

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