Determine what is the best estimate of cdbs cost of equity

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Stock in CDB Industries has a beta of 0.90. The market risk premium is 7 percent, and T-bills are currently yielding 4 percent. CDB's most recent dividend was $1.90 per share, and dividends are expected to grow at a 5 percent annual rate indefinitely. If the stock sells for $41 per share, what is your best estimate of CDB's cost of equity?

Reference no: EM13336269

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