What is the cost of equity


Yi Corporation has no preferred stock and reports the following:

2009
Earnings per share $1.80
Dividends per share $0.72
Book Value per share-end of year $8.62

If price-to-book value at the end of 2009 equals 1.00, and return on beginning of year equity is expected to remain constant, then what is the cost of equity (to nearest percent) ?

 

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Accounting Basics: What is the cost of equity
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