What is your best estimate of the company cost of equity

Assignment Help Financial Management

Reference no: EM132032690

Stock in CDB Industries has a beta of 1.05. The market risk premium is 7.0 percent, and T-bills are currently yielding 4.0 percent. CDB’s most recent dividend was $2.90 per share, and dividends are expected to grow at an annual rate of 5.0 percent indefinitely.

If the stock sells for $51 per share, what is your best estimate of the company's cost of equity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Cost of equity %

Reference no: EM132032690

Questions Cloud

Strongest return on investment in case study : Which approach for diversification (related-constrained or related-linked) has the strongest return on investment in this case study?

Discuss significant influences on their painting styles : Search the internet to find two works of art from the Renaissance through the 17th century, one by an Italian artist and one by a Dutch artist.

How to design a basic bureaucratic control system : 1. How to become a better "sender" and "receiver" of information, and, 2. How to design a basic bureaucratic control system.

Prepare journal entries : Susan Graham Corp. was organized on January 12, 2014. Nov 1 Issued 1,000 shares of preferred stock for cash at $112 per share. Prepare Journal Entries

What is your best estimate of the company cost of equity : If the stock sells for $51 per share, what is your best estimate of the company's cost of equity?

What information determines the scope of a policy : Need to get some brief ideas about questions below, 1. What information determines the scope of a policy?

Canadian corporate diversity culture : What is the difference between Canadian corporate diversity culture and American corporate diversity culture? (using Trompenaars and Hofstede's 4 diversity.

Implementing strategies for continuous improvement : Question: When implementing strategies for continuous improvement, what must you keep in mind?

What gain or loss would be recognized by corp a : Assume corp A acquires Corp B's assets followed by a liquidation of Corp B. What gain / loss would be recognized by corp A, Corp B, Anton and Beth

User Account

All Pages