Calculate the cost of equity using the DCF method

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Reference no: EM13927961

Epley Industries stock has a beta of 1.30. The company just paid a dividend of $.30, and the dividends are expected to grow at 4 percent. The expected return on the market is 13 percent, and Treasury bills are yielding 5.1 percent. The most recent stock price for the company is $68.

a. Calculate the cost of equity using the DCF method.

b. Calculate the cost of equity using the SML method.

Reference no: EM13927961

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