Homework Answers
Ans 12.10%
| P0 = | Price of Share |
| D1 = | Current Dividend |
| Ke = | Cost of Equity |
| g = | growth rate |
| P0 = | D1 / (Ke - g) |
| 14.44 = | 1.2133 / (Ke - 3.70%) |
| Ke - 3.70% = | 1.2133 / 14.44 |
| Ke - 3.70% = | 8.40% |
| Ke = | 8.40% + 3.70% |
| Ke = | 12.10% |
| D1 = | D0* (1 + g) |
| D1 = | 1.17* (1 + 3.70%) |
| D1 = | 1.2133 |
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