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HighGrowth Company has a stock price of $17. The firm will pay a dividend next year...

HighGrowth Company has a stock price of $17. The firm will pay a dividend next year of $0.98​, and its dividend is expected to grow at a rate of 3.7% per year thereafter. What is your estimate of​ HighGrowth's cost of equity​ capital?

The required return​ (cost of​ capital) of levered equity is _____%. (Round to one decimal​ place.)

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Answer #1

What is your estimate of​ High Growth's cost of equity​ capital

=(D1/P)+dividend growth

=(0.98/17)+3.7%

=9.5%

the above is answer..

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