DHL’s shares are currently trading at R35 a share. The shares are expected to pay a...
DHL’s shares are currently trading at R35 a share. The shares
are expected to pay a dividend of R4 a share at the end of the year
(D1 = R4), and the dividend is expected to grow at a constant rate
of 5 percent a year.
Required:
Calculate the cost of its equity.
Homework Answers
Cost of equity=(D1/current price)+growth rate
=(4/35)+0.05
Which is equal
=16.43%(approx).
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