Assuming Dividends Are to Remain Constant into the Future,what Is

question 40

Multiple Choice

Assuming dividends are to remain constant into the future,what is the implied current cost of equity capital for Limex Industries when the most recent dividend paid was 50 cents and the current share price is $5.88?

• A)8.50 per cent
• B)10.80 per cent
• C)11.76 per cent
• D)2.94 per cent

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Definitions:

Cash Flows

The total amount of money being transferred in and out of a business, especially as affecting liquidity.

Cash Dividend

A payment made by a company to its shareholders, usually as a distribution of profits.

Operating Activities

Transactions and events that directly affect the financial position of a company, primarily related to its core business operations.

Comparative Balance

A financial statement that presents balances of accounts or financial metrics at different points in time for comparison.