Question
Suppose you are an analyst with the following data: r RF = 1%; r M r RF = 5%; b = 0.7; D 1 =
| Suppose you are an analyst with the following data: rRF = 1%; rM rRF = 5%; b = 0.7; D1 = $2.00; P0 = $25.00; g = 6%. a. What is this firms cost of equity using the DCF approach? |
b. What is the cost of firm's equity using the CAPM approach?
c. What estimate should the analyst use? (Hint: find the average).
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Financial Management Theory And Practice
Authors: Prasanna Chandra
7th Edition
0070656657, 978-0070656659
