Cullumber wok co. is expected to pay a dividend of $1.80 one year from today on its common shares. that dividend is expected to increase by 5.00 percent every year thereafter. if the price of cullumber common stock is $20.00, what is the cost of its common equity capital?
a. cost of common equity
%

14.00%

Explanation:

Given that,

Expected Dividend = $1.80

Expected Growth Rate  of dividend = 5%

Price of Cullumber common stock = $20.00

Cost of Common Equity = (Expected Dividend ÷ Current Price ) + Growth Rate

                                       = (1.80 ÷ 20) + 5%

                                       = 0.09 + 5%

                                       = 14.00%

Therefore, the cost of its common equity capital is 14%.

if you use only 25 for your entertainment and only 200 for the groceries that you really need and take out the 50 per month for the computer then that should be enough

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