10q

Stock in Daenerys Industries has a beta of 1.15. The market risk premium is 9.5 percent, and T-bills are currently yielding 3.5 percent. The company's most recent dividend was $1.9 per share, and dividends are expected to grow at a 6.5 percent annual rate indefinitely. If the stock sells for $37 per share, what is your best estimate of the company's cost of equity?

rev: 09_20_2012

Multiple Choice

• 10.4%

• 11.38%

• 13.2%

• 11.97%

• 14.43%

10 b

Holdup Bank has an issue of preferred stock with a $5 stated dividend that just sold for $87 per share. What is the bank's cost of preferred stock?

Multiple Choice

• 5.52%

• 5.98%

• 5.75%

• 6.03%

• 5.00%