What is the firm cost of equity

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1. Audio, Inc. common stock is priced currently at $17.50 a share. The company just paid $1.30 per share as its annual dividend. The dividends have been increasing by 3.5 percent annually and are expected to continue doing the same. What is this firm's cost of equity?

A 6.03 percent

B 6.18 percent

C 8.47 percent

D 9.41 percent

E 11.19 percent

2. Game Studio, LLC is expected to pay an annual dividend of $0.70 a share next year. The market price of the stock is $17.20 and the growth rate is 6 percent. What is the firm's cost of equity?

A.7.58 percent

B 7.91 percent

C 8.24 percent

D 9.08 percent

E 10.07 percent

Reference no: EM131980890

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