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    Business Finance: Calculating Cost of Equity

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    Just need some help on this one problem.

    Calculating Cost of Equity. A company just issued a dividend of $2.30 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 $42 a share, what is the company's cost of equity?

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    Solution Summary

    The answer contains the computation of cost of equity when dividend per share, market value per share and growth rate are given