Builtrite's common stock is currently selling for $86 a share and the firm just paid an annual dividend of $3.80 per share.  Management believes that dividends and earnings should grow at 7% annually. Based on this, and a marginal tax rate of 34%, what is the cost of common stock (also known as the cost of retained earnings)?

Answer rating: 100% (QA)

To calculate the cost of common stock cost of retained earnings we can use the Gordon Growth Model T... View the full answer