Question
Stock in Daenerys Industries has a beta of .95. The market risk premium is 7 percent, and T-bills are currently yielding 3.6 percent. The company's
Stock in Daenerys Industries has a beta of .95. The market risk premium is 7 percent, and T-bills are currently yielding 3.6 percent. The company's most recent dividend was $2.05 per share, and dividends are expected to grow at an annual rate of 4.1 percent indefinitely. If the stock sells for $39 per share, what is your best estimate of the company's cost of equity?
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International Finance Theory and Policy
Authors: Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz
10th edition
978-0133425895, 133425894, 978-0133423631, 133423638, 978-0133423648
