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What is the estimated cost of equity

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Problem - Management of Rose corp. is attempting to estimate the firm's cost of equity capital. Assuming that the firm has a constant growth rate of 5%, a forecasted dividend of 2.11, and a stock price of 23.12, what is the estimated cost of equity using the dividend-yield-plus-growth approach?

a. 12.3%

b. 15 6%

c. 14.1%

d. 9 1%

Reference no: EM132736714

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