Problem:
The Giants Jersey Stores just paid its first annual dividend of $0.12 a share. The firm plans to increase the dividend by 3.5% per year indefinitely.
Requirement:
Question: What is the firm's cost of equity of the current stock price is $6.50 a share?
- 4.35%
- 5.41%
- 14.42%
- 18.79
- 19.98%
Note: Show all workings.