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Suppose Stark Ltd. just issued a dividend of $2.14 per share on its common stock....

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Accounting

Suppose Stark Ltd. just issued a dividend of $2.14 per share on its common stock. The company paid dividends of $1.80, $1.89, $1.96, and $2.07 per share in the last four years. If the stock currently sells for $60, what is your best estimate of the companys cost of equity capital using the arithmetic average growth rate in dividends? What if you use the geometric average growth rate?

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