Ask Question
29 May, 14:52

The current Stock price is P0 = $30.00; next year's expected dividend is $2.70 (D1 = $2.70); and the dividend is expected to grow at a constant rate of 8%. What is the firm's expected cost of retained equity (rs) ? (Careful!)

+2
Answers (1)
  1. 29 May, 18:47
    0
    Cost of Equity = 17%

    Explanation:

    Current Stock Price = Expected Dividend / (Cost of Equity - growth rate)

    30 = 2.70 / (Cost of Equity - 8%)

    Cost of Equity = 17%
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “The current Stock price is P0 = $30.00; next year's expected dividend is $2.70 (D1 = $2.70); and the dividend is expected to grow at a ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers