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Compute the cost of the firm common stock equity

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Reference no: EM132690338

Question - A firm has common stock with a market price of P55 per share and an expected dividend of P2.81 per share at the end of the coming year. The dividends paid on the outstanding stock over the past five years are as follows:

Year Dividend

1 P 2.00

2 2.14

3 2.29

4 2.45

5 2.62

Compute the cost of the firm's common stock equity?

a. 5.1 percent

b. 15.4 percent

c. 4.1 percent

d. 12.1 percent

Reference no: EM132690338

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