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Amino Industries common shares sell for $100 per share. Amino expects to set their next annual...

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Finance

Amino Industries common shares sell for $100 per share. Aminoexpects to set their next annual dividend at $4.00 per share. IfAmino expects future dividends to grow at 5 percent per year,indefinitely, the current risk-free rate is 2 percent, the expectedrate on the market is 7 percent, and the stock has a beta of 1.5,what should be the best estimate of the firm's cost of equity?

Multiple Choice

  • 18.50 percent

  • 13.25 percent

  • 9.25 percent

  • 7.27 percent

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