Duke Energy has been paying dividends steadily for 20 years. During that time, dividends have grown...
Duke Energy has been paying dividends steadily for 20 years. During that time, dividends have grown at a compound annual rate of
33%.
If Duke Energy's current stock price is
$85
and the firm plans to pay a dividend of
$5.40
next year, what is Duke's cost of common stock
equity?
Homework Answers
cost of common stock equity=(D1/Current price)+Growth rate
=(5.4/85)+0.33
which is equal to
=39.35%(Approx).
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