What is the opportunity cost of capital

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Reference no: EM13913737

Eastern Electric currently pays a dividend of about $1.96 per share and sells for $33 a share.

If investors believe the growth rate of dividends is 4% per year, what is the opportunity cost of capital?

If investors' opportunity cost of capital is 10%, what must be the growth rate they expect of the firm?

If the sustainable growth rate is 5% and the plowback ratio is .5, what must be the return on equity ROE?

Reference no: EM13913737

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