CALCULATING COST OF EQUITY The Absolute Zero Co. just issued a dividend of $3.40 per share on it common stock. The company is expected to maintain a constant 4.5 percent growth rate in its dividends indefinitely. If the stock sells for $35 a share, what is the company's cost of equity?
The Graber Corporation's common stock has a bet of 1.15. If the risk is 3.5 percent and the expected return on the market is 11 percent, what is the company's cost of equity capital?