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Countess Corp. is expected to pay an annual dividend of $4.39 on its common stock in one year. The current stock price is $92 per share. The company announced that it will increase its dividend by 3.55% annually. What is the company's cost of equity

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Zviko

Answer:

8.32 %

Explanation:

With the information provided, we can calculate the company's cost of equity by using the Dividend Growth Model.

Thus,

Cost of Equity = Dividend / Stock Price + Expected Growth

Therefore,

Cost of Equity = $4.39 / $92 + 3.55%

                       = 8.32 %

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