Best estimate of company cost of equity

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Stock in CDB Industries has a beta of 1.10. The market risk premium is 7.0 percent, and T-bills are currently yielding 4.0 percent. CDB’s most recent dividend was $3.40 per share, and dividends are expected to grow at an annual rate of 5.0 percent indefinitely. If the stock sells for $56 per share, what is your best estimate of the company's cost of equity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Cost of equity %

Reference no: EM131564421

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