Best estimate of cdb cost of equity

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Stock in CDB Industries has a beta of .98. The market risk premium is 7.3 percent, and T-bills are currently yielding 4.3 percent. CDB's most recent dividend was $2.70 per share, and dividends are expected to grow at a 5.3 percent annual rate indefinitely.

Required:

If the stock sells for $49 per share, what is your best estimate of CDB's cost of equity? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Reference no: EM131317695

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