Estimating the dcf growth rate


Suppose In a Found Ltd. just issued a dividend of $1.43 per share on its common stock. The company paid dividends of $1.05, $1.12, $1.19, and $1.30 per share in the last four years. If the stock currently sells for $45, your best estimate of the company's cost of equity capital using the arithmetic average growth rate in dividends is ___percent. If you use the geometric average growth rate, your best estimate is ___percent.

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Finance Basics: Estimating the dcf growth rate
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