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LM are just about to pay a dividend of 20 cents a share. Historically, dividends have grown at a rate of 5% each year.
The current share price is $3.05.
The cost of equity using the dividend valuation model is:
Suggested Answer: A
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7 comments · newest first
RO
Rosenda
1 year ago
Historically, 5% growth is solid, but what's the market saying?
FE
Felice
1 year ago
Wait, how can the cost of equity be only 6.9%? That seems low!
VI
Vincent
1 year ago
I'm leaning towards 11.9%, seems reasonable.
EL
Elbert
1 year ago
I think the cost of equity is definitely higher than 7.4%.
JU
Julian
1 year ago
The dividend is 20 cents, and growth is 5%.
TH
Theola
1 year ago
This one seems straightforward. Receiving components only when needed should reduce inventory, so I'll go with D.
VI
Viva
1 year ago
Hmm, I'm a bit unsure about this one. I know WebLogic has a lot of configuration options, so I'll need to think through the different ways to set the deployment name.