Use the following information to answer the question(s) below.
Rearden Metals has a current stock price of $30 share, is expected to pay a dividend of $1.20 in one year, and its expected price right after paying that dividend is $33.
-Rearden's equity cost of capital is closest to:
A) 4.0%
B) 6.4%
C) 8.2%
D) 10.0%
E) 14.0%

Question

Quizplus · Accepted Answer

E) Equity cost of capital = 1.20/30.00 + (33 - 30)/30 = .04 + .10 = .14

Use the Following Information to Answer the Question(s) Below