Question

Using the formula from Supplement A that computes the cost of common stock as part of figuring the cost of capital, which of the following is the cost of common stock percentage to be applied to the cost of capital calculation if a company's dividend per share is $30, net value is $120 and the dividend growth rate is 20 percent?
A. 45 percent
B. 25 percent
C. 20 percent
D. 19.5 percent
E. 16 percent

Answer

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