How do you find the cost of equity

Reference no: EM131974433

Question: How do you find the cost of equity using the DCF method for this question: PNC's stock sells for $21 per share. The company currently does not pay a dividend, but its long-run business plan calls for a dividend of $0.50 per share to paid at the end of 2007. The plan also forecasts a growth rate of 75% in 2008, 40% in 2009, and 7.5% thereafter. These specific growth rates have not been reported to the public, but information that has been released provides guidance that has lead analysts to similar but not exact forecasts. Current year is 2005.

Reference no: EM131974433

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