What is the best estimate of the companys cost of equity

Assignment Help Financial Econometrics

Reference no: EM13333881

Suppose In a Found Ltd. just issued a dividend of $2.15 per share on its common stock. The company paid dividends of $1.75, $1.89, $1.96, and $2.07 per share in the last four years.

If the stock currently sells for $40, what is your best estimate of the company's cost of equity capital using the arithmetic average growth rate in dividends?

What if you use the geometric average growth rate?

Reference no: EM13333881

Questions Cloud

Caculate the fair value of a stock with a beta : caculate the fair value of a stock with a beta of .90 if the riskless rate is 4% and the expected market return is 7% if the stock is expected to pay a dividend $.50 and is expected

Create a very abstract programming environment : Find these header files in the Visual Studio system and determine the smallest (i.e., most negative) and largest (i.e., most positive) values that can be represented as int, unsigned int, long, unsigned long, float and double.

Find the average angular acceleration that disk experiences : A uniform disk is constrained to rotate about an axis passing through its center and perpendicular to the plane of the disk. find the average angular acceleration that the disk experiences

Find what will be the return be if you sell your shares : you buy 1500 stocks of LOL inc at $35.50 each. what will be your % return be if you sell your shares a year from now at $37.25, if OCD pays an annual per-share dividend of $.50

What is the best estimate of the companys cost of equity : Suppose In a Found Ltd. just issued a dividend of $2.15 per share on its common stock. The company paid dividends of $1.75, $1.89, $1.96, and $2.07 per share in the last four years.

How much work must be done on the satellite to move it : A 60.0-kg satellite is in orbit a distance 2000 km above the surface of the earth. How much work must be done on the satellite to move it to a circular orbit 5000 km above the surface of the earth

What was the basis of the moral judgments : What was the basis of the moral judgments made by Samuel Adams and Thomas Hutchinson? What steps might Samuel Adams and Thomas Hutchinson have taking in becoming individuals and which steps made them such important historical people?

Evaluate the rms voltage : A generator consists of 23 loops, each with an area of 0.010m^2 located inside a uniform magnetic field of 2.0T. What is the rms voltage

The poisson random variable is discrete : Two international students were talking in the wake of the Singapore Air disaster a few years ago. The first student said she had been intending to fly Singapore Air for the semester break, but wasn’t going to now that there had been an accident!

User Account

All Pages