Given That Shares Have an Expected Dividend Stream of 10

question 6

Multiple Choice

Given that shares have an expected dividend stream of 10 cents in perpetuity and that the current market price of the shares is $2.40,calculate the cost of equity capital of these shares.

• A)8%
• B)12%
• C)10%
• D)4.2%

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Definitions:

Statute of Frauds

A rule of law mandating specific agreements must be documented with the signatures of those participating to be valid and binding.

Oral Evidence

Testimony given by a witness or party during a trial based on what the witness has heard or personally experienced.

Statute of Frauds

A legal principle requiring certain types of contracts to be written and signed to be enforceable.

Assignments

The act of transferring rights, property, or responsibilities from one party to another.