Employing the constant growth dividend discount? model

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Pan American? Airlines' shares are currently trading at $58.49 each. The market yield on Pan? Am's debt is 7?% and the? firm's beta is 0.6. The? T-Bill rate is 3.25?% and the expected return on the market is 9?%. The? company's target capital structure is 40?% debt and 60?% equity. Pan American Airlines pays a combined federal and state tax rate of 45?%. What is the estimated cost of common? equity, employing the constant growth dividend discount? model? Assume that Pan Am pays annual dividends and that the last dividend of $2.18 per share was paid yesterday. Pan Am started paying dividends 4 years ago. The first dividend was $1.51 per share.  

Employing the constant growth dividend discount? model, the estimated cost of common equity for Pan Am is?___%

?(Round to two decimal? places.)

Reference no: EM131580674

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