3. 3. Calculating cost of equity [LO 14.1] Shares in Daenerys Limited have a beta of 1.05....

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3. 3.

Calculating cost of equity [LO 14.1] Shares in Daenerys Limited have a beta of 1.05. The market risk premium is 7 per cent and riskfree rate is currently 3.4 per cent. The company’s most recent dividend was $2.35 per share and dividends are expected to grow at an annual rate of 4.1 per cent indefinitely. If the shares sell for $43 per share, what is your best estimate of the company’s cost of equity?

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