What is the cost of equity implied

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Reference no: EM131276140

Suppose that the median price-to-earnings ratio for the S&P 500 is 15.0.

If the long-run return on equity is 13.5 percent and the long-run growth in gross domestic product (GDP) is expected to be 6.7 percent (3.5 percent real growth and 3.2 percent inflation), what is the cost of equity implied by the equity-denominated key value driver formula?

Reference no: EM131276140

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