Question: Q. Estimate the future cost of equity (r E ) using the Dividend Growth Model. (a) 3 year Dividend growth rate (g) ( the growth

Q. Estimate the future cost of equity (r_E) using the Dividend Growth Model.

(a) 3 year Dividend growth rate (g) ( the growth rate over 3 years, calculated as the annualized rate of growth between the current years dividend per share and the dividend per share 3 years prior) = 17.88% convert the three year growth rate to an effective quarterly rate dividend growth rate

Cash Dividend (D₀)= 0.3125, Stock Price (P₀)=75.78

(b) Using the information above to calculate the quarterly cost of equity using the dividend growth model.

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