is $11$ percent, what is the company s cost or equity capital?

Calculating Cost of Equity $[$LO$1]$ Stock in Daenerys Industries has a beta of $.95.$

The market risk premium is $7$ percent, and T$-$bills are currently yielding $3\mathrm{.}6$ percent.

The company's most recent dividend was $$2\mathrm{.}05$ per share, and dividends are

expected to grow at an annual rate of $4\mathrm{.}1$ percent indefinitely. If the stock sells for

$$39$ per share, what is your best estimate of the company's cost of equity?

Estimating the DCF Growth Rate $[$LO$1]$ Suppose Stark, Ltd$.,$ just issued a divi$-$

dend of $$2\mathrm{.}08$ per share on its common stock. The company paid dividends of $$1\mathrm{.}71,$

$$1\mathrm{.}82,$ $$1\mathrm{.}93,$ and $$1\mathrm{.}99$ per share in the last four years. If the stock currently sells

for $$45,$ what is your best estimate of the company's cost of equity capital using the

arithmetic average growth rate in dividends? What if you use the geometric average

growth rate?