2B4B THE HATCH SAUSAGE COMPANY IS PROJECTING AN ANNUAL GROWTH RATE FO...
136.
CSO: 2B4b
LOS: 2B4b
The Hatch Sausage Company is projecting an annual growth rate for the foreseeable
future of 9%. The most recent dividend paid was $3.00 per share. New common stock
can be issued at $36 per share. Using the constant growth model, what is the
approximate cost of capital for retained earnings?
a.
9.08%.
b.
17.33%.
c.
18.08%
d.
19.88%.