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9. Given this information: Beta: 1.6 Market risk premium 8% Risk free rate: 3% Dividends expected to grow 4% per year Last dividend: 2 EUR

9. Given this information: Beta: 1.6 Market risk premium 8% Risk free rate: 3% Dividends expected to grow 4% per year Last dividend: 2 EUR Equity selling at 17.5 a) What is the expected cost of equity using the CAPM?

b) What is the expected cost of equity using the dividend growth model?

c) Is there any difference between them? And if risk free rate decrease by 1%?

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