1. Which one of the following favors a high dividend payout?
A. flotation costs
B. high personal tax rate on dividend income
C. uncertainty resolution
D. dividend restrictions
2. The return that shareholders require on their investment in the firm is called? the:
A. cost of equity.
B. dividend yield.
C. cost of capital.
D. income return.
E. capital gains yield.
2. ?Fred's Lawn and? Garden's last dividend per share was ?$2.26. The stock sells for ?$30 per? share, and the expected growth rate for the company is 14%. Calculate the? company's cost of equity.