Best estimate of company cost of equity

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Stock in Country Road Industries has a beta of 1.41. The market risk premium is 7.5 percent, and T-bills are currently yielding 5 percent. The company's most recent dividend was $1.9 per share, and dividends are expected to grow at a 7.5 percent annual rate indefinitely. If the stock sells for $31 per share, what is your best estimate of the company's cost of equity? (Do not round your intermediate calculations.)

11.51%

15.58%

14.09%

8.53%

14.83%

Reference no: EM131575535

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