Multiple Choice
Using the constant growth model, a firm's expected dividend yield (D1) is 4% of the stock price, and its growth rate is 5%. If the tax rate is 35%, what is the firm's cost of equity?
A) 10%
B) 6.65%
C) 9.0%
D) 5.85%
Correct Answer:
Verified
Correct Answer:
Verified
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