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The dividend is expected to grow at 8 percent indefinitely

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Suppose stock in Watta Corporation has a beta of .80. The market risk premium is 6 percent, and the risk-free rate is 6 percent. Watta's last dividend was $1.20 per share, and the dividend is expected to grow at 8 percent indefinitely. The stock currently sells for $45 per share. What is Watta's cost of equity capital?

Reference no: EM13479935

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