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    Carpetto's cost of common equity

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    The earnings, dividends, and common stock price of Carpetto Technologies Inc. are expected to grow at 7 percent per year in the future. Carpetto's common stock sells for $23 per share, its last dividend was $2.00, and it will pay a dividend of $2.14 at the end of the current year. Assuming you have equal confidence in the outputs used for the three approaches, what is your estimate of Carpetto's cost of common equity?

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    https://brainmass.com/business/business-math/carpetto-s-cost-of-common-equity-216103

    Solution Preview

    What is your estimate of Carpetto's cost of common equity?

    Cost= Estimated dividend/Price +Growth rate
    =2.14/23 ...

    Solution Summary

    This provides the steps to calculate the Carpetto's cost of common equity

    $2.19

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