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TeachMeFinance has a beta of 1.03. The Treasury bill rate is 5.5 percent. The market risk premium is 8.5 percent. The company paid a $1.9
TeachMeFinance has a beta of 1.03. The Treasury bill rate is 5.5 percent. The market risk premium is 8.5 percent. The company paid a $1.9 per share dividend a couple of days ago, and it is planning to increase its dividends at a 6 percent annual rate indefinitely. You also know that the company's shares of stock can now be purchased for $35 per share. Based on the above information, what is your best estimate of TeachMeFinance's cost of equity? (Do not round your intermediate calculations.)
Multiple Choice
A.11.75%
B.10.37%
C.14.26%
D.13%
E.8.59%
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