Suppose stark ltd just issued a dividend of 196 per share, Ask an Expert

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Suppose Stark Ltd. just issued a dividend of $1.96 per share on its common stock. The company paid dividends of $1.60, $1.70, $1.77, and $1.88 per share in the last four years.

If the stock currently sells for $70, what is your best estimate of the company’s cost of equity capital using the arithmetic average growth rate in dividends?

What if you use the geometric average growth rate?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91608002

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