Cost of common equity
Not what you're looking for?
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. Using the DCF approach, what is the cost of common equity?
Purchase this Solution
Solution Summary
This provide the steps of calculation of cost of common equity using DCF approach
Solution Preview
Cost of common equity= Estimated Dividend/Price +Growth rate
=2.14/23+7%
=0.163043478 or 16.34%=Answer
Note:
*** Remember, this ...
Purchase this Solution
Free BrainMass Quizzes
Motivation
This tests some key elements of major motivation theories.
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.
Business Ethics Awareness Strategy
This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.
Lean your Process
This quiz will help you understand the basic concepts of Lean.