Question: Estimating the DCF Growth Rate. Suppose Hornsby Ltd. just issued a dividend of $1.65 per share on its common stock. The company paid dividends of $1.24, $1.33, $1.44, and $1.53 per share in the last four years. If the stock currently sells for $55, what is your best estimate of the company's cost of equity capital using arithmetic and geometric growth rates?