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The Down and Out Co. just issued a dividend of $2.71 per share on its common...

The Down and Out Co. just issued a dividend of $2.71 per share on its common stock. The company is expected to maintain a constant 6 percent growth rate in its dividends indefinitely. If the stock sells for $45 a share, what is the company's cost of equity? Sample answer format: 2 decimals (unless integer) with NO %. 1.23% will be presented as 1.23 and 2.00% (integer) presented as 2.

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Answer #1

cost of equity = 12.38% or 12.38

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