Problem:
Martin Industries just paid an annual dividend of $2.00 a share. The market price of the stock is $38.00 and the growth rate is 7.6 percent.
Required:
Question: What is the firm's cost of equity?
• 13.26 percent
• 14.27 percent
• 12.32 percent
• 6.63 percent
• 26.52 percent
Note: Explain all steps comprehensively.