Consider the following dividend and price data for Chrysler: Use the Gordon model to calculate Chrysler ?

Question:

Consider the following dividend and price data for Chrysler:

Use the Gordon model to calculate Chrysler ? s cost of equity at end-1996 on the basis of dividends only.

Cost Of Equity
The 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...