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FinanceQ&A LibrarySuppose Hornsby Ltd. just issued a dividend of $2.55 per share on its common stock. The company paid dividends of $2.05, $2.12, $2.29, and $2.39 per share in the last four years. If the stock currently sells for $74, what is your best estimate of the company’s cost of equity capital using arithmetic and geometric growth rates?Question

Suppose Hornsby Ltd. just issued a dividend of $2.55 per share on its common stock. The company paid dividends of $2.05, $2.12, $2.29, and $2.39 per share in the last four years.

If the stock currently sells for $74, what is your best estimate of the company’s cost of equity capital using arithmetic and geometric growth rates?

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