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What is the estimate of the firm annual percentage cost

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Question - The common stock of Mulberry Mustard Industries currently sells for $54.68 per share. Securities analysts feel that most stock market investors expect Mulberry's future dividends to grow by a fairly constant 2.2% per year into the distant future, such that they can justify using the constant dividend growth model in their analysis. Based on this approach (also called the discounted cash flow technique), what is the estimate of the firm's annual percentage cost of common equity (ke) financing if the per-share dividend paid in the most recent year (D0) was $2.84?

A. 5.31%

B. 7.39%

C. 5.19%

D. 7.51%

E. 6.39%

Reference no: EM132968092

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