Management believe is correct cost of common equity for firm

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Reference no: EM131902909

Underestimated Inc.’s common shares currently sell for $32 each. The firm’s management believes that its shares should really sell for $59 each. The firm just paid an annual dividend of $2 per share and management expects those dividends to increase by 9 percent per year forever (and this is common knowledge to the market). What is the current cost of common equity for the firm? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25%.)

The current cost of common equity for the firm % ?

What does management believe is the correct cost of common equity for the firm? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25%.)

Cost of common equity (as per firm's belief) %?

Reference no: EM131902909

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