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

question 59

Multiple Choice

Use the following information to answer the following question(s) .
Berlioz Inc.is trying to estimate its cost of ordinary equity,and it has the following information.The firm has a beta of 0.90,the before-tax cost of the firm's debt is 7.75%,and the firm estimates that the risk-free rate is 4% while the current market return is 12%.Berlioz shares currently sell for $35.00 per share.The firm pays dividends annually and expects dividends to grow at a constant rate of 5% indefinitely.The most recent dividend per share,paid yesterday,is $2.00.Finally,the firm has a marginal tax rate of 34%.
-The cost of ordinary equity using the dividend-growth model is

• A)11.00%.
• B)11.32%.
• C)11.50%.
• D)11.72%.

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Definitions:

Serum Protein

Proteins present in blood serum, which include antibodies, albumin, and other globulins, playing roles in clotting, immune system function, and other processes.

Urine

Urine is a liquid waste product of the body that is excreted by the kidneys through the process of urination.

IVP

Intravenous pyelogram, a radiographic test that uses a contrast material to visualize and assess the kidneys, ureters, and bladder.

Meaning

The significance or definition of a word, phrase, symbol, or action.