Cost of equity capital using arithmetic

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Suppose Hornsby Ltd. just issued a dividend of $2.50 per share on its common stock. The company paid dividends of $2.00, $2.07, $2.24, and $2.34 per share in the last four years.

If the stock currently sells for $69, what is your best estimate of the company's cost of equity capital using arithmetic and geometric growth rates?

Cost of equity

Arithmetic dividend growth rate %

Geometric dividend growth rate %

Reference no: EM132184982

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