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Find what the company before-tax cost of retained earnings

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Reference no: EM132894194

Problem 1: A company's share price is currently $4.90. Its most recent dividend was 60 cents per share; dividends are expected to grow indefinitely at a rate of 4% pa and the tax rate is 30%. The company's before-tax cost of retained earnings is:

A. 14.59%
B. 22.19%
C. 19.74%
D. 15.02%

Reference no: EM132894194

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