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13.7 A,B,C,D- please assist and show your work 13.7 Golden State Home Health, Inc., is a large, California-based s profit home health agency. Its dividends
13.7 A,B,C,D- please assist and show your work
13.7 Golden State Home Health, Inc., is a large, California-based s profit home health agency. Its dividends are expected to a constant rate of 5 percent per year into the foreseeable futur The firm's last dividend (Do) was $1, and its current stock price $10. The firm's beta coefficient is 1.2; the rate of return grow a ble future. and its current stock price is T-bonds currently is 8 percent and the expected rate of retu on the market, as reported by a large financial services firm, is 14 percent. Golden State's target capital structure calls for 6 debt financing, the interest rate required on its new debt is 9 percent, and the firm's tax rate is 30 percent. a. What is the firm's cost-of-equity estimate according to the DCE 0 percent method? b. What is the cost-of equity estimate according to the CAPM c. On the basis of your answers to parts a and b, what would be your final estimate for the firm's cost of equity? d. What is your estimate for the firm's corporate cost of capital 13.8 A local entrenreneurisltineStep by Step Solution
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