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need help Bunkhouse Electronics is a recently incorporated firm that makes electronic entertainment systems. Its earnings and dividends have been growing at a rate of
need help
Bunkhouse Electronics is a recently incorporated firm that makes electronic entertainment systems. Its earnings and dividends have been growing at a rate of 31.0%, and the current dividend yield is 3.00%. Its beta is 1.22, the market risk premium is 9.00%, and the risk-free rate is 3.80%. a. Use the CAPM to estimate the firm's cost of equity. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Cost of equity b. Now use the constant growth model to estimate the cost of equity. (Do not round intermediate calculations. Enter your answer as a whole percent.) Cost of equity % c. Which of the two estimates is more reasonable? O CAPM O Growth model Nodebt Inc. is a firm with all-equity financing. Its equity beta is 0.80. The Treasury bill rate is 3%, and the market risk premium is expected to be 7%. a. What is Nodebt's asset beta? (Round your answer to 2 decimal places.) Asset betaStep by Step Solution
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