LR Engines Stock Is Selling for $42

question 57

Multiple Choice

LR Engines stock is selling for $42.39 a share,has an ROE of 14.3 percent,and a dividend payout ratio of 35 percent.The next expected dividend is $1.62 a share.What is the cost of equity for this firm?

• A)12.86 percent
• B)13.12 percent
• C)13.47 percent
• D)12.52 percent
• E)13.70 percent

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