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Growth Plc have 3 million shares in issue with a current market value of £0.98 per share (ex-div). In 20X9 the company had earnings of £700,500 out of which they made a total dividend payment of £140,100. Growth Plc are experiencing a 40% return on equity. Using the current reinvestment level approach, what is the cost of equity? [xx%]
The forums are not here simply for you to get other people to solve your questions.
You presumably have an answer in the same book as you found the question (if not then you should be using a different book) and so you should say what problem you are having with it!
I do suggest you watch the free lectures on calculating the cost of equity – either the P4 lectures, or the F9 lectures (because this is revision of F9).
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