The cost of equity capital for the firm

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Will Co. is expected to pay a dividend of $2 per share at the end of year -1(D1) and the dividends are expected to grow at a constant rate of 4% forever. If the current price of the stock is $20 per share calculate the expected return or the cost of equity capital for the firm:

a. 10%

b. 4%

c. 14%

d. None of the above

Reference no: EM131185885

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