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TeachMeFinance has a beta of 1.04. The Treasury bill rate is 4.5 percent. The market risk premium is 8.5 percent. The company paid a $1.9
TeachMeFinance has a beta of 1.04. The Treasury bill rate is 4.5 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 7 percent annual rate indefinitely. You also know that the company's shares of stock can now be purchased for $38 per share. Based on the above information, what is your best estimate of TeachMeFinance's cost of equity?
Multiple Choice 12.85% 10.71% 12.35% 8.66%
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