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Hey could you explain what method you use to solve this problem? Parvis Ind. wants to calculate its cost of equity. The company paid a
Hey could you explain what method you use to solve this problem?
Parvis Ind. wants to calculate its cost of equity. The company paid a dividend of 0.40 this year which is growing at 6% annually. It also has a risk premium rate of 796, WACC-10%, a terminal FCF growth rate of 8%, and the following expected free cash flows for the next 3 years: 2020 2021 2022 50 60 75 If Paris' current stock price is $12 and its average cost of debt is 4.5%, find 1) Rs using the bond risk premium model; 2) Rs using the discounted dividend model Parvis cost of equity using bond risk premium Parvis cost of equity using discounted dividendStep by Step Solution
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