Reliable Electric is a regulated public utility, and it is expected to provide steady dividend growth of

Question:

Reliable Electric is a regulated public utility, and it is expected to provide steady dividend growth of 5% per year for the indefinite future. Its last dividend was $5 per share; the stock sold for $60 per share just after the dividend was paid. What is the company's percentage cost of equity?

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...