Determine the growth rate of dividends

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Reference no: EM132029170

Cost of common stock equity- Ross Textiles wishes to measure its cost of common stock equity. The? firm's stock is currently selling for $68.92. The firm expects to pay a $3.41 dividend at the end of the year (2016). The dividends for the past 5 years are shown in the following table:

Year Dividend per Share

2015 $3.07

2014 $2.63

2013 $2.59

2012 $2.28

2011 $2.02

A) Determine the growth rate of dividends from 2011 to 2015.

B) Determine the net proceeds, Nn, that the firm will actually receive.

C) Using the constant-growth valuation model, determine the cost of retained earnings, rs.

D) Using the constant-growth valuation model, determine the cost of new common stock, rn.

Reference no: EM132029170

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