Gremlin Industries Will Pay a Dividend of $1

question 8

Multiple Choice

Gremlin Industries will pay a dividend of $1.90 per share this year. It is expected that this dividend will grow by 4% per year each year in the future. The current price of Gremlin's stock is $23.50 per share. What is Gremlin's equity cost of capital?

• A) 11%
• B) 12%
• C) 14%
• D) 16%