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Best estimate of the company cost of equity

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Reference no: EM132200089

Stock in Daenerys Industries has a beta of 1.1. The market risk premium is 7 percent, and T-bills are currently yielding 5.2 percent. The company's most recent dividend was $1.60 per share, and dividends are expected to grow at an annual rate of 6 percent indefinitely.

If the stock sells for $40 per share, what is your best estimate of the company's cost of equity?

Reference no: EM132200089

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