Sheepdog Rescue Just Paid Its First Annual Dividend of $1

question 21

Multiple Choice

Sheepdog Rescue just paid its first annual dividend of $1.95 a share.The firm plans to increase the dividend by 1.75 percent per year indefinitely.What is the firm's cost of equity if the current stock price is $31.45 per share?

• A)6.31 percent
• B)8.06 percent
• C)10.38 percent
• D)4.93 percent
• E)5.94 percent

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Definitions:

Nationalization

The process by which a government takes control over a privately-owned company or industry.

Rule of Law

The principle that all members of a society, including those in government, are equally subject to publicly disclosed legal codes and processes.

Infrastructure

The basic physical and organizational infrastructure and services such as buildings, roads, and power facilities required for the functioning of a society or business.

Human Capital

The collective skills, knowledge, and other intangible assets of individuals that can be used to create economic value.