4. The cost of retained earnings The cost of raising capital through retained earnings is the cost of raising capital through issuing new common stock. The current risk-free rate of return is 3.80% and the greater than sk premium is 6.60%. Blue Hamster Manufacturing Inc. has a beta of 1.56. Using the capital Asset Pricing Model (CAPM) approach less than cost of equity is Fuzzy Button Clothing Company is closely held and, as a result, cannot generate reliable inputs for the CAPM approach. Fuzzy Button's bonds yield 11.50%, and the firm's analysts estimate that the firm's risk premium on its stock relative to its bonds is 3.50%. Using the bond-yield-plus-risk- premium approach, the firm's cost of equity is The stock of Cute Camel Woodcraft Company is currently selling for $32.45, and the firm expects its dividend to be $2.35 in one year. Analysts project the firm's growth rate to be constant at 5.70%. Using the discounted cash flow (DCF) approach, Cute Camel's cost of equity is estimated to be 4. The cost of retained earnings The cost of raising capital through retained earnings is the cost of raising capital through issuing new common stock. The current risk-free rate of retum is 3.80% and the current market risk premium is 6.60%. Blue Hamster Manufacturing Inc. has a beta of 1.56. Using the Capital Asset Pricing Model (CAPM) approach, Blue Hamster's cost of equity is 18.33% Fuzzy Button Clothing Company is closely held and, as a result, cannot generate reliable he CAPM approach. Fuzzy Button's bonds yield 11.50%, and the firm's analysts estimate that the firm's risk premium on its stock relativ 15.51%ds is 3.50%. Using the bond-yield-plus-risk- premium approach, the firm's cost of equity is 14.81% The stock of Cute Camel Woodcraft Company is currently selling for $32.45, and the firm 14.10% dividend to be $2.35 in one year. Analysts project the firm's growth rate to be constant at 5.70%. Using the discounted cash flow (DCF) approacir, cote camel's cost of equity is estimated to be 4. The cost of retained earnings The cost of raising capital through retained eamings is the cost of raising capital through issuing new common stock. 18.75% The current risk-free rate of return is 3.80% as ent market risk premium is 6.60%. Blue Hamster Manufacturing Inc, has a beta of 1.56. 18.00% Using the Capital Asset Pricing Model (CAPM) lue Hamster's cost of equity is 14.25% Fuzzy Button Clothing Company is dosely held result, cannot generate reliable inputs for the CAPM approach. Fuzzy Button's bonds yield 15.00% 11.50%, and the firm's analysts estimate that Bisk premium on its stock relative to its bonds is 3.50%. Using the bond-yield-plus-risk- premium approach, the firm's cost of equity is The stock of Cute Camel Woodcraft Company is currently selling for $32.45, and the firm expects its dividend to be $2.35 in one year. Analysts project the firm's growth rate to be constant at 5.70%. Using the discounted cash flow (DCF) approach, Cute Camel's cost of equity is estimated to be 4. The cost of retained earnings The cost of raising capital through retained earnings is the cost of raising capital through issuing new common stock The current risk-free rate of return is 3.80% and the current market risk premium is 6.60%. Blue Hamster Manufacturing Inc. has a beta of 1.56. Using the Capital Asset Pricing Model (CAPM) approach, Blue Hamster's cost of equity is 17.47% n Clothing Company is closely held and, as a result, cannot generate reliable inputs for the CAPM approach. Fuzzy Button's bonds yield d the firm's analysts estimate that the firm's risk premium on its stock relative to its bonds is 3.50%. Using the bond-yield-plus-risk- 16.18% pproach, the firm's cost of equity is 12.94% Cute Camel Woodcraft Company is currently selling for $32.45, and the firm expects its dividend to be $2.35 in one year. Analysts project rowth rate to be constant at 5.70%. Using the discounted cash flow (DCF) approach, Cute Camel's cost of equity is estimated to be 12.29%
