Please tell me how the answer could be 13%?Forums › ACCA Forums › ACCA FM Financial Management Forums › Please tell me how the answer could be 13%?This topic has 2 replies, 2 voices, and was last updated 13 years ago by coco78.Viewing 3 posts - 1 through 3 (of 3 total)AuthorPosts October 25, 2011 at 7:10 pm #50222 coco78MemberTopics: 8Replies: 4☆The market value of Delta’s shares are $2 and the last dividend paid was 25c. The annual growth rate of dividends is expected to be 5%. What is the cost of equity capital?I answered it as25(1.05)/200+0.05= 18.25% October 25, 2011 at 7:37 pm #89084 PudgeMemberTopics: 2Replies: 10☆The issue is Po-g therefore should be 200-5%…try again with this and this should give you 13% October 27, 2011 at 6:15 pm #89085 coco78MemberTopics: 8Replies: 4☆Thank you kipudge.Got it now, 25/190 = 13%AuthorPostsViewing 3 posts - 1 through 3 (of 3 total)You must be logged in to reply to this topic.Log In Username: Password: Keep me signed in Log In