Find the best estimate of companys cost of equity

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Reference no: EM131996456

Stock in CDB Industries has a beta of 1.14. The market risk premium is 7.4 percent, and T-bills are currently yielding 4.4 percent.

CDB's most recent dividend was $3.80 per share, and dividends are expected to grow at an annual rate of 5.4 percent indefinitely.

If the stock sells for $60 per share, what is your best estimate of the company's cost of equity?

Reference no: EM131996456

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