Answered: An ordinary share selling at a current…

An ordinary share selling at a current market price of RO 15 and paying a current dividend of RO 0.10 per share which is expected to grow at a rate of 6%. What is the cost of Equity?

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter9: The Cost Of Capital

Section: Chapter Questions

Problem 5P

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Question

An ordinary share selling at a current market price of RO 15 and paying a current dividend of RO 0.10 per share which is expected to grow at a rate of 6%. What is the cost of Equity?

Definition Definition Amount of return a company generally pays to its equity investors. The cost of equity represents the compensation required by the market in lieu of owning the asset firm and simultaneously bearing the risk of ownership.

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