The Third Cup Company Has a Return on Equity of 10

question 48

Multiple Choice

The Third Cup Company has a return on equity of 10% and pays out 30% of its earnings as dividends.The company is expected to pay a dividend of $2 next year and the current stock price is $20.The cost of equity of The Third Cup Company is:

• A)17%
• B)13%
• C)10%
• D)7%

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Definitions:

Unbiased Consumer Feedback

Genuine opinions or evaluations from customers regarding a product or service that are not influenced by personal feelings or company manipulation.

Focus Groups

Small, diverse groups of people whose reactions are studied especially in market research or political analysis to gain insights into opinions and attitudes.

Work Flow

The sequence of processes or steps involved in completing a task or project, often involving multiple individuals or systems.

Public And Customer Relations

The strategies and practices a business uses to communicate and build positive relationships with the public and its customers.