Calculate company t cost of equity capital

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Reference no: EM132970538

Ordinary shares in Company T are listed on the London Stock Exchange.

  • Company T has announced a dividend of 25p per ordinary share for the current year. There will be only one dividend payable for the year.
  • It is forecast that Company T will announce a dividend of 26p per ordinary share for next year and that there will be only one dividend payable for the year.
  • Company T's shares have a market price of 110.08p

Problem 1: Calculate Company T's cost of equity capital based on the information above.

Reference no: EM132970538

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