Use the Following Information to Answer the Question(s) Below

question 14

Multiple Choice

Use the following information to answer the question(s) below.
Rearden Metals has a current stock price of $30 share, is expected to pay a dividend of $1.20 in one year, and its expected price right after paying that dividend is $33.
-Rearden's equity cost of capital is closest to:

• A) 4.0%
• B) 6.4%
• C) 8.2%
• D) 10.0%
• E) 14.0%

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Definitions:

Application

In computing and automation, a program or group of programs designed for end-users to perform a specific task or range of tasks.

Tasks

Activities or operations carried out by a process or machine.

Routine

A block of code designed to perform a specific operation, often reusable, that is executed to accomplish a task in software development.