Using the dividend discount model, what is the cost of equity capital for Zeller Mining if the company will pay a dividend of C$2.30 next year, has a payout ratio of 30 percent, a return on equity (ROE) of 15 percent, and a stock price of C$45?
a. 9.61 percent.
b. 10.50 percent.
c. 15.61 percent.
Ans: c. 15.61 percent.
Business
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