Duke Energy has been paying dividends steadily for 20 years. During that time, dividends have grown at a compound annual rate of 5%. If Duke Energy's current stock price is $71 and the firm plans to pay a dividend of $6.40 next year, what is Duke's cost of common stock equity? Duke's cost of common stock equity is _______%.
cost of common stock equity = (Expected Dividend / Current Price) + Growth Rate
= ($ 6.40 / $ 71) + 5 %
= 14.01408451%
Hence the correct answer is 14.01%
Duke Energy has been paying dividends steadily for 20 years. During that time, dividends have grown...
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