Explore BrainMass

Cost of equity for Lester's Electronics

This content was STOLEN from BrainMass.com - View the original, and get the solution, here!

Last week, Lester's Electronics paid an annual dividend of $2.75 on its common stock. The company has a longstanding policy of increasing its dividend by 3 percent annually. This policy is expected to continue. What is the firm's cost of equity if the stock is currently selling for $42.5 a share?

1. 9.66 percent
2. 7.77 percent
3. 8.80 percent
4. 7.22 percent
5. 9.91 percent.

© BrainMass Inc. brainmass.com September 24, 2018, 7:26 am ad1c9bdddf - https://brainmass.com/business/issuing-equity/cost-of-equity-for-lester-s-electronics-442773