Computer Corp. just paid a dividend of $0.75. If the firm's growth in dividends is expected to remain at a flat 3 percent forever, then what is the cost of equity capital for Computer Corp. if the price of its common shares is currently $12.00

A.9.44%
B.6.44%
C.9.25%
D 6.25%

The answer is A.

Explanation:

One of the methods to determine cost of equity is the dividend growth model and the formula is:

(D1/Po) + g

D1 is the future or next year dividend

Po is the present share value

g is the growth rate

Since the dividend are expected to grow by 3 percent, then the future dividend will be

1.03 x $0.75

=$0.7725

Po = $12.00

g is 3 percent

($0.7725/$12) + 3%

0.06438 + 3%

6.44% + 3%

9.44%

the most important factor in the

work process or industry is to retain the interest of the employee. and to

retain them, their salary or profit must be adjusted to the best value. unless

the employee does not do his job properly, employees must receive bonuses or

benefits to ensure them to stay in the company. it will actually make them stay

longer, make them feel important and reduce costs for hiring new employees.

explanation:

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answer; coefficient of correlation;