Estimate ajax cost of equity capital

Reference no: EM13305682

The Ajax Company currently pays dividend of $2.00 per share on its common shares and its current earnings are $3.00. The company has a sustainable ROE of 12 percent and the payout ratio is considered to be stable at current levels. If Ajax common shares are currently selling at $25 per share, estimate Ajax's cost of equity capital.

Reference no: EM13305682

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