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JJ's current share price is $1.80,with a dividend of $0.20 a share just about to be paid.
Dividends have increased at an average annualgrowth rate of 4.5% and this is expected to continue into the future.
What is JJ'scost of equity?
Suggested Answer: A
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11 comments · newest first
KI
Kina
12 months ago
I agree, 17.6% seems way too high for this.
TA
Taryn
12 months ago
Surprised the growth rate is only 4.5%!
SH
Sherita
1 year ago
I think it’s more like 12.5%, not sure about 16.1%.
TR
Trina
1 year ago
Cost of equity is definitely around 16.1%.
CY
Cyndy
1 year ago
JJ's share price is $1.80 with a $0.20 dividend.
SA
Salena
1 year ago
I think I calculated something like 16.1% in a practice problem, but I can’t recall the exact details.
HA
Hannah
1 year ago
I practiced a question like this where the cost of equity was around 15%. I wonder if it’s close to that here.
CA
Carole
1 year ago
I’m a bit unsure about the growth rate. Is it 4.5% compounded annually or just a flat rate?
HO
Howard
1 year ago
I remember we used the Gordon Growth Model for similar questions. I think the formula is something like (D1/P0) + g.
CH
Chauncey
1 year ago
The item includes determine how and when the serialization process is executed, right? I think that's what option B is referring to. I'll double-check that in my notes to make sure.
QU
Quiana
1 year ago
Okay, I think I've got this. An l-VPLS is a logical VPLS, which can be associated with multiple B-VPLS, or Bridged VPLS, services. So the answer is A, TRUE.