ABC Corp. has a stock price P 0 = 50. The firm has just paid a dividend
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ABC Corp. has a stock price P0 = 50. The firm has just paid a dividend of $3 per share, and intelligent shareholders think that this dividend will grow by a rate of 5% per year. Use the Gordon dividend model to calculate the cost of equity of ABC.
Cost Of EquityThe cost of equity is the return a company requires to decide if an investment meets capital return requirements. Firms often use it as a capital budgeting threshold for the required rate of return. A firm's cost of equity represents the... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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