What is the cost of equity for Fat Rat Laboratories, Inc.? Assume that the stock has the following dividends, the stock sells for $70 with flotation costs of $6, and Fat Rat expects to pay a dividend of $3.20 next year (rounded).   YEARS DIVIDENDS 2014 $2.94 2013 $2.70 2012 $2.4

EBK CFIN
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Chapter11: The Cost Of Capital
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QUESTION 13

  1. What is the cost of equity for Fat Rat Laboratories, Inc.? Assume that the stock has the following dividends, the stock sells for $70 with flotation costs of $6, and Fat Rat expects to pay a dividend of $3.20 next year (rounded).
     

    YEARS

    DIVIDENDS

    2014

    $2.94

    2013

    $2.70

    2012

    $2.49

    2011

    $2.29

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