BMIG Ltd has a current share price of $12.13.It is expected to pay $0.73 in dividends next period and it has a growth rate of 12%.What is the cost of equity capital for BMIG Ltd?
A) $ 12.13 \% $
B) $ 14.71 \% $
C) $ 16.08 \% $
D) $ 18.02 \% $

Question

Quizplus · Accepted Answer

Using the DDM equation 13.1,we can find the cost of equity capital as follows:

BMIG Ltd Has a Current Share Price of $12 12.13% 12.13 \% 12.13%

BMIG Ltd Has a Current Share Price of $12 $12.13 \%$