Underestimated incrsquos common shares currently sell for, Ask an Expert

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Underestimated Inc.’s common shares currently sell for $40 each. The firm’s management believes that its shares should really sell for $49 each. The firm just paid an annual dividend of $2 per share and management expects those dividends to increase by 5 percent per year forever (and this is common knowledge to the market)

What is the current cost of common equity for the firm?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91609355

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