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Problem:

A firm has common stock with a market price of $67 per share and an expected dividend of $2.81 per share at the end of the coming year. The dividends paid on the outstanding stock over the past five years are as follows:

Year1 Dividend $2

Y2 $2.14

Y3 $2.29

Y4 $2.45

Y5 $2.62

The cost of the firm's common stock equity is

Explain in detail and also show all work.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M91147490

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