If coca-colas equity cost of capital is 8 what share price, Ask an Expert

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Assume that it is mid - 2006, when Coca-Cola Company had a share price of $43. The firm paid a dividend of $1.24, and you expect Coca-Cola to raise this dividend by approximately 7% per year in perpetuity.

a) If coca-Cola's equity cost of capital is 8%, what share price would you expect based on your estimate of the dividend growth rate?

b) Given Coca-Cola's share price, what would you conclude about your assessment of Coca-Cola's future dividend growth?

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M954650

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