Question

NoGrowth Corporation currently pays a dividend of $2.08 per year, and it will continue to pay this dividend forever. What is the price per share if its equity cost of capital is 14% per year?

The price per share if its equity cost of capital is 14% per year is $_______ (Round to the nearest cent.)

Step 1

**Cost of Equity: **It is the cost of the company while raising finance by issuing equity. It is earnings from the investment to the firm’s equity investors. It is the return to the stockholder holders’ equity investments.

Step 2

**Calculation of price per share:**

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