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1. Auric Enterprises has an equity beta () of 1.17. Assuming an EMRP of 5% and a risk free rate (Rf) of 1.5%, what is
1. Auric Enterprises has an equity beta () of 1.17. Assuming an EMRP of 5% and a risk free rate (Rf) of 1.5%, what is Aurics cost of equity (Re)? Auric has a 100% dividend payout ratio and currently pays a dividend of $3.80. After 5 years it intends to reduce its dividend to $3.50 but expects the dividend to grow at 2% per year. Using the Dividend Discount Model, what is the current value of Aurics stock?
Please use excel and show the formula.
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