Geometric dividend growth rate

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Suppose Hornsby Ltd. just issued a dividend of $2.53 per share on its common stock. The company paid dividends of $2.03, $2.10, $2.27, and $2.37 per share in the last four years. If the stock currently sells for $72, what is your best estimate of the company’s cost of equity capital using arithmetic and geometric growth rates?

Arithmetic dividend growth rate = ?

Geometric dividend growth rate = ?

Reference no: EM131567389

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