An analyst does research about the cost of
问题:
An analyst does research about the cost of capital and gathers the following information about a company:
·Current share price is $60
·Current annual dividend per share is $1.50
·Stable retention ratio is 40%
·Historical return on equity is 12%
Using the dividend discount model approach, the cost of equity is closest to:
A. 7.30%
B. 7.42%
C. 9.88%