Problem:
Martin Industries just paid an annual dividend of $1.50 a share. The market price of the stock is $50.60 and the growth rate is 8.0 percent.
Required:
Question: What is the firm's cost of equity?
- 11.20 percent
- 7.47 percent
- 12.10 percent
- 16.80 percent
- 10.37 percent
Note: Show supporting computations in good form.