Will CoIs Expected to Pay a Dividend of $2 Per Share

Multiple Choice

Will Co.is expected to pay a dividend of $2 per share at the end of year 1(D₁) ,and the dividends are expected to grow at a constant rate of 4% forever.If the current price of the stock is $20 per share,calculate the expected return or the cost of equity capital for the firm.

A) 10%
B) 4%
C) 14%
D) 20%