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    Managerial Economics Study Set 4
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    Exam 12: Capital Budgeting and Risk
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    Inc'S Stock Is Currently $50
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Inc'S Stock Is Currently $50

Question 38

Question 38

Short Answer

Inc.'s stock is currently $50.The last dividend that they paid was $1.If dividends are expected to increase at a 10% annual rate,what is the firm's equity cost of capital?

Correct Answer:

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ke = D1/P0 + g...

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