What is johnsons cost of internal equity


Problem

Johnson Enterprises' stock is currently selling for $25.67 per share, and the firm expects its per-share dividend to be $1.38 in one year. Analysts project the firm's growth rate to be constant at 7.27%. Estimating the cost of equity using the discounted cash flow (or dividend growth) approach, what is Johnson's cost of internal equity?

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Finance Basics: What is johnsons cost of internal equity
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