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 (risk-free rate).
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 (risk-free rate). The company paid $1.65 in dividend 5 years ago and the most recent dividend was $2.05 per share. The current market price of the stock is $39 per share.
- What is the cost of equity using SML?
- What is the growth rate?
- What is the cost of equity using DGM?
- What is the overall cost of equity if the firm takes average of cost equity from SML and DGM methods?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Fundamentals Of Corporate Finance
Authors: Richard A. Brealey, Marcus, Alan J, Myers, Stewart C.
2nd Edition
0070074860, 9780070074866
