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.Circle Inc. has the following information: (1) r d = yield on the firms bonds = 7.00% and the risk premium over its own debt
.Circle Inc. has the following information: (1) rd = yield on the firms bonds = 7.00% and the risk premium over its own debt cost = 4.00%. (2) rf = 5.00%, rm = 11.00%, and beta = 1.65. (3) D1 = $1.20, P0 = $35.00, and g = 8.00% (constant). Circle Inc. needs to estimate the cost of equity based on the three commonly used methods. What is the difference between the highest value and lowest value? (Hint: Find the three estimates of cost of equity and use the highest estimate minus the lowest estimate.)
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