Estimate of the company cost of equity capital

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Reference no: EM131913325

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? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Cost of equity

Arithmetic dividend growth rate %

Geometric dividend growth rate %

Reference no: EM131913325

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