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Suppose Powers Ltd. just issued a dividend of $2.55 per share on its common stock....

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Finance

Suppose Powers Ltd. just issued a dividend of $2.55 per share on its common stock. The company paid dividends of $2.05, $2.12, $2.29, and $2.39 per share in the last four years.

Required:

What was the dividend growth rate for each year? (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).)

Growth rate
Year 1 %
Year 2 %
Year 3 %
Year 4 %

What were the arithmetic and geometric dividend growth rates over the past four years? (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).)

Cost of equity
Arithmetic dividend growth rate %
Geometric dividend growth rate %

If the stock currently sells for $74, what is your best estimate of the companys cost of equity capital using arithmetic and geometric growth rates? (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).)

Cost of equity
Arithmetic dividend growth rate %
Geometric dividend growth rate %

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