A company's next dividend is expected to be $1.15 per share and the dividends are...
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A company's next dividend is expected to be $1.15 per share and the dividends are expected to grow forever at a constant rate of 7.2% per year. The stock's beta is 0.96, the tax rate is 40%, and the market risk premium is 5.1% per year. If the expected market return is 11.4% per year, what is the company's annual cost of retained earnings financing? 1) 10.8% O2) 11.6% 3) 12.7% 4) 11.2% 5) 12.3%
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