Which One of the Following Would Tend to Have the Greatest

question 335

Multiple Choice

Which one of the following would tend to have the greatest effect on the cost of equity?

• A) A 10% one-time increase in a firm's dividend.
• B) A 10% increase in the growth rate of a firm's dividends.
• C) The elimination of one dividend payment five years from now.
• D) A 10% decline in the market value of a firm's common stock.
• E) A 10% increase in the market value of a firm's common stock.