An All-Equity Firm Produced a Dividend Flow of $20,000 Last

question 108

Multiple Choice

An all-equity firm produced a dividend flow of $20,000 last year.The market value of the firm is $650,000 and the dividend is expected to increase at 4% each year.What is the cost of equity capital for this firm?

• A)5.5%
• B)6.2%
• C)7.2%
• D)7.8%

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