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Question
What is the cost of equity for Rolling In Dough Bakeries if dividends are listed below and the price of the stock is $31.50? Flotation costs are 10% of the price.| YEAR | DIVIDENDS | |
| 2005 | $3.75 | |
| 2004 | $3.60 | |
| 2003 | $3.45 | |
| 2002 | $3.40 |
a. 12.8%
b. 22.7%
c. 15.2%
d. 16.6%
Answer
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