Question
Floyd Industries stock has a beta of 1.30.The company has just paid a dividend of $0.30, and the dividend is expected to grow by 4
Floyd Industries stock has a beta of 1.30. The company has just paid a dividend of $0.30, and the dividend is expected to grow by 4 percent per year. The expected return in the market is 13 percent and Treasury bills yield 4.8 percent. Floyd's most recent stock price is $65.
to. Calculate the cost of capital using the DDM method.
b. Calculate the cost of capital using the SML method.
Step by Step Solution
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Step: 1
a To calculate the cost of capital using the dividend discount model DDM we can use the following ...
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
10th edition
978-0077511388, 78034779, 9780077511340, 77511387, 9780078034770, 77511344, 978-0077861759
