Gremlin Industries Will Pay a Dividend of $1

question 12

Multiple Choice

Gremlin Industries will pay a dividend of $1.80 per share this year. It is expected that this dividend will grow by 4% per year each year in the future. The current price of a Gremlin share is $22.40. What is Gremlin's equity cost of capital?

• A) 12%
• B) 16%
• C) 14%
• D) 11%

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