Estimate of the company cost of equity capital

Reference no: EM132198565

Question - Suppose Found Ltd. just issued a dividend of £1.43 per share on its equity. The company paid dividends of £1.05, £1.12, £1.19, and £1.30 per share in the last 4 years. (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Requirement - If the equity currently sells for £45, what is your best estimate of the company's cost of equity capital using the arithmetic average growth rate in dividends?

Reference no: EM132198565

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