# Suppose Stark Ltd. just issued a dividend of $2.08 per share on its common stock. The company paid dividends of$1.75, $1.82,$1.89, and $2.00 per share in the last four years. a. If the stock currently sells for$55, what is your best estimate of the company’s cost of equity capital using the arithmetic average growth rate in dividends? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. What if you use the geometric average growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Question
 Suppose Stark Ltd. just issued a dividend of $2.08 per share on its common stock. The company paid dividends of$1.75, $1.82,$1.89, and $2.00 per share in the last four years.  a. If the stock currently sells for$55, what is your best estimate of the company’s cost of equity capital using the arithmetic average growth rate in dividends? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. What if you use the geometric average growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

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