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Bouchard Company's stock sells for $21 per share, its last dividend (Do) was $1.00, and its
growth rate is a constant 7 percent. What is its cost of common stock, rs? Express your answer in
percentage (without the % sign) and round it to two decimal places. (ie., 12.54 for 0.1254)
Solution
cost of common stock for the company = 1*1.07/21 + 7%
cost of common stock for the company = 12.10%

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Bouchard Companys stock sells for $21 per share, its last dividen.pdf

  • 1. Bouchard Company's stock sells for $21 per share, its last dividend (Do) was $1.00, and its growth rate is a constant 7 percent. What is its cost of common stock, rs? Express your answer in percentage (without the % sign) and round it to two decimal places. (ie., 12.54 for 0.1254) Solution cost of common stock for the company = 1*1.07/21 + 7% cost of common stock for the company = 12.10%