alleryStart learning →D0 = Rs 2.5, g = 6%, price Rs 53. Cost of equity by growth model?
A16%
B10.7%
C11%
D5%
Answer & Solution
Correct answer: C. 11%
D1 = 2.5 x 1.06 = 2.65; 2.65/53 = 5%; 5 + 6 = 11%.
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