The Midfield Co. just issued a dividend of $1.36 per share on its common stock. The company is expected to maintain a constant 3 percent growth rate in its dividends indefinitely. If the stock sells for $28 a share, what is the company's cost of equity? 8.08% 7.64% 7.33% O 7.16% O 8.00%

The Midfield Co. just issued a dividend of $1.36 per share on its common stock. The company is expected to maintain a constant 3 percent growth rate in its dividends indefinitely. If the stock sells for $28 a share, what is the company's cost of equity? 8.08% 7.64% 7.33% O 7.16% O 8.00%

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter11: Determining The Cost Of Capital

Section: Chapter Questions

Problem 13P: The Cost of Equity and Flotation Costs Messman Manufacturing will issue common stock to the public...

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Question

The Midfield Co. just issued a dividend of $1.36 per share on its common stock. The company is
expected to maintain a constant 3 percent growth rate in its dividends indefinitely. If the stock
sells for $28 a share, what is the company's cost of equity?
8.08%
7.64%
7.33%
7.16%
8.00%

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