Below is the history of the dividend payments for the HMST firm. What is your best estimate for the firm's cost of equity on December 3, 2021, if on that day the stock sells for $40? Date Paid 12/1/2017 12/1/2018 12/1/2019 12/1/2020 12/1/2021 Dividend $3.5 $3.68 $3.95 $4.29 $5.32 O 31.00% 19.73% 18.70% 23.11% 26.07%

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 67BE
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Below is the history of the dividend payments for the HMST firm.
What is your best estimate for the firm's cost of equity on December 3, 2021, if on that day the stock sells for $40?
Date Paid 12/1/2017 12/1/2018 12/1/2019 12/1/2020 12/1/2021
$3.68
Dividend $3.5
$3.95
$4.29
$5.32
31.00%
19.73%
18.70%
23.11%
26.07%
Transcribed Image Text:Below is the history of the dividend payments for the HMST firm. What is your best estimate for the firm's cost of equity on December 3, 2021, if on that day the stock sells for $40? Date Paid 12/1/2017 12/1/2018 12/1/2019 12/1/2020 12/1/2021 $3.68 Dividend $3.5 $3.95 $4.29 $5.32 31.00% 19.73% 18.70% 23.11% 26.07%
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