Problemgrays tools just issued a dividend of 160 per share, Ask an Expert

Accounting

Problem:

Gray's Tools just issued a dividend of $1.60 per share on its common stock. The company is expected to maintain a constant 4 percent growth rate in its dividends indefinitely.

Required:

Question: If the stock sells for $31 a share, what is the company's cost of equity?

8.81 percent
9.37 percent
9.94 percent
10.32 percent
11.46 percent

Note: Please answer in proper manner and show all computations

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91170600

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