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Business Finance: Calculating Cost of Equity

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?

Solution Summary

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