Calculating Cost of Equity. Stock in CDB Industries has a beta of 1.10. The market risk premium is 7.8 percent, and T-bills are currently yielding 3.5 percent. CDBs most recent dividend was $2.35 per share, and dividends are expected to grow at an annual rate of 5 percent indefinitely. If the stock sells for $45 per share, what is your best estimate of the companys cost of equity?