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

question 88

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)14.0%.

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Definitions:

Flexible Benefit Plans

Employee benefit plans that allow individuals to choose from a variety of offerings, tailoring their benefits package to fit personal needs and preferences.

Administration Costs

Expenses associated with the general operation of a business, including office supplies, utilities, and executive salaries, but excluding production and marketing costs.

Outsourcing

The business practice of hiring a party outside a company to perform services or create goods that traditionally were performed in-house by the company's own employees.

Benefits Vendors

Companies or service providers that offer and manage benefits such as health insurance, retirement plans, and other perks for employees on behalf of employers.