What is the cost of internal common equity?

Question

The expected dividend is $1.50 for a share of common stock priced at $15. What is the cost of internal common equity if the long-term growth in dividends is projected to be 4 percent indefinitely?

a) 6.0 percent

b) 8.0 percent

c) 12.0 percent

d) 14.0 percent

Explain your answer

Answer 1

This is your school work.  YOU explain the answer.  That is the only way you will learn.

Answer 2

d) 14.0 percent