Question
The beta of a company is 1.0, the return on the DOW Jones 14%, US treasury bills currently yield 8%, the company has historically maintained
The beta of a company is 1.0, the return on the DOW Jones 14%, US treasury bills currently yield 8%, the company has historically maintained a growth rate of 5% in dividends and investors expect to receive a $2 dividend per share in the next year. Using the available data, what would Ke be?
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calculate the companys cost of equity Ke using the Capital Asset Pricing Model CAPM and the Gordon ...Get Instant Access to Expert-Tailored Solutions
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Practical financial management
Authors: William r. Lasher
5th Edition
0324422636, 978-0324422634
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