Stock in CDB Industries has a beta of 1.10. The market risk premium is 7.2 percent, and
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Stock in CDB Industries has a beta of 1.10. The market risk premium is 7.2 percent, and T-bills are currently yielding 4.1 percent. The most recent dividend was $2.56 per share, and dividends are expected to grow at an annual rate of 5 percent indefinitely. If the stock sells for $45 per share, what is your best estimate of the company’s cost of equity?
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Related Book For 
Essentials of Corporate Finance
ISBN: 978-1260013955
10th edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
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