Use the Following Information to Answer the Question(s)below

question 88

Multiple Choice

Use the following information to answer the question(s) below.
Rearden Metals has a current stock price of $30 share,is expected to pay a dividend of $1.20 in one year,and its expected price right after paying that dividend is $33.
-Rearden's equity cost of capital is closest to:

• A)4.0%.
• B)6.4%.
• C)8.2%.
• D)14.0%.

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Definitions:

Future Crises

Potential, unforeseen events that could lead to severe economic, social, or environmental problems.

Low-Interest Rate Policy

A monetary policy strategy used by central banks to maintain low borrowing costs to stimulate economic growth.

Housing Prices

The cost to purchase a residential property, which fluctuates based on demand, location, and economic conditions.

Lending Standards

The criteria used by lenders to determine the creditworthiness of potential borrowers.