Question
Old Country Lemonade has a beta of .9, a stock pOld Country Lemonade has a beta of .9, a stock price of $28, and recently
Old Country Lemonade has a beta of .9, a stock pOld Country Lemonade has a beta of .9, a stock price of $28, and recently paid an annual dividend of $1.10 a share. The dividend growth rate is 3 percent. The market has an 12% rate of return and a risk premium of 7 percent. What is the average expected cost of equity for Old Country Lemonade (Hint: Calculate Re by two different models and average the two results)? rice of $28, and recently paid an annual dividend of $1.10 a share. The dividend growth rate is 3 percent. The market has an 12% rate of return and a risk premium of 7 percent. What is the average expected cost of equity for Old Country Lemonade (Hint: Calculate Re by two different models and average the two results)?
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