15) ABC Service's common stock (the only source of capital for ABC) is currently trading at...

Question

Question

15) ABC Services common stock (the only source of capital for ABC) is currently trading at $43.00 per share. ABC just paid a

Answer 1

Answer #1

Price = recent dividend* (1 + growth rate )/(cost of equity - growth rate)

43 = 2 * (1+0.03) / (Cost of equity - 0.03)

Cost of equity% = 7.79

Answer 2

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