Question: Help find growth rate B. NAME PROBLEM SET 4 Chapter 9- Cost of Capital Assigned Problem 4 Grateway Inc. has a corporate cost of capital
B. NAME PROBLEM SET 4 Chapter 9- Cost of Capital Assigned Problem 4 Grateway Inc. has a corporate cost of capital of 11.5 percent. Its target capital structure is 55 percent equity and 45 percent debt. The before-tax cost of debt is 9 percent, and the company's tax rate is 30 percent. If the expected dividend next period (Di) and current stock price are S5 and S45, respectively, what is the company's growth rate? Hint: First solve for the cost of equity R(Re)
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