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Stock of Company A has a beta of .85. The market risk premium is 8%, and T-bills are currentlyyielding 5%. The company's most recent dividend

  1. Stock of Company A has a beta of .85. The market risk premium is 8%, and T-bills are currentlyyielding 5%. The company's most recent dividend was $1.60 per share, and dividends areexpected to grow at 6% annual rate indefinitely. If the stock sells for $37 per share, what is yourbest estimate of the company's cost equity?

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