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The Sisyphean Companys common stock is currently trading for $27.25 per share. The stock is expected to pay a $3 dividend at the end of the year and the Sisyphean Companys equity cost of capital is 14% lf the dividend payout rate is expected to remain constant, then the expected growth rate in the companys earnings is closest to: OA. OB, 1.5% 4.49% C. OD, 598% 2.00%
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Answer #1

Cost of capital=(D1/Current price)+Growth rate

0.14=(3/27.25)+Growth rate

Growth rate=0.14-(3/27.25)

which is equal to

=2.99%(Approx).

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