a. Cost of capital =8.4%
Dividend next year =1.16
Cost of capital =8.4%
Share price =Dividend Next year/(Cost of Capital -growth)
=1.16/(8.4%-6.4%) =58.00
b. Future growth rate =Cost of capital -Dividend Next Year/Price
=8.4% -1.16/43.91 =5.76%
Assume that Cola Co. has a share price of $43.91. The firm will pay a dividend...
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