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Berta Industries stock has a beta of 1.25. The company just paid a dividend of $.40, and the dividends are expected to grow at 5
Berta Industries stock has a beta of 1.25. The company just paid a dividend of $.40, and the dividends are expected to grow at 5 percent. The expected return on the market is 12 percent, and Treasury bills are yielding 5.5 percent. The most recent stock price for Berta is $72.
a. | Calculate the cost of equity using the DCF method. (Round your answer to 2 decimal places. (e.g., 32.16)) |
DCF method | % |
b. | Calculate the cost of equity using the SML method. (Round your answer to 2 decimal places. (e.g., 32.16)) |
SML method | % |
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