Stock in Daenerys Industries has a beta of 0.83. The market risk premium is 9.5 percent, and T-bills are currently yielding 4 percent. The company's most recent dividend was $1.9 per share, and dividends are expected to grow at a 4.5 percent annual rate indefinitely. If the stock sells for $37 per share, what is your best estimate of the company's cost of equity?

rev: 09_20_2012

Multiple Choice

• 9.87%

• 10.88%

• 9.42%

• 8.57%

• 11.88%