Chelsea Fashions is expected to pay an annual dividend of $0.80 a share next year. The market price of the stock is $22.40 and the growth rate is 5 percent. What is the firm's cost of equity?
A) 7.58 percent
B) 7.91 percent
C) 8.24 percent
D) 8.57 percent
E) 9.00 percent
Correct Answer:
Verified
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