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The Down and Out Co. just issued a dividend of $2.21

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The Down and Out Co. just issued a dividend of $2.21

 

The Down and Out Co. just issued a dividend of $2.21 per share on its common stock. The company is expected to maintain a constant 5 percent growth rate in its dividends indefinitely. If the stock sells for $40 a share, what is the company’s cost of equity? (Do not round your intermediate calculations.)

Multiple Choice

  • 11.34%
  • 10.8%
  • 5.93%
  • 10.53%
  • 10.26%

     

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