Equity capital using arithmetic and geometric growth rates

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Reference no: EM13942212

Suppose Powers Ltd. just issued a dividend of $2.49 per share on its common stock. The company paid dividends of $1.99, $2.06, $2.23, and $2.33 per share in the last four years.

Required: If the stock currently sells for $68, what is your best estimate of the company’s cost of equity capital using arithmetic and geometric growth rates?

Reference no: EM13942212

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