Question
The following financial information is available on Rawls Manufacturing Company: Current per share market price $48.00 Beta 1.1 Expected rate of return on market 12.0%
The following financial information is available on Rawls Manufacturing Company:
| Current per share market price | $48.00 |
| Beta | 1.1 |
| Expected rate of return on market | 12.0% |
| Risk-free rate | 6.0% |
Rawls can issue new common stock to net the company $44 per share. Determine the cost of internal equity capital using the capital asset pricing model approach. (Compute answer to the nearest 0.1%)
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Dividend Growth Investing Machine
Authors: Andrew P.C.
1st Edition
1521728461, 978-1521728468
