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The price of our common stock is $25. The constant growth rate in dividends is 8% and our current dividend (D0) is $0.75. Also, 172
The price of our common stock is $25. The constant growth rate in dividends is 8% and our current dividend (D0) is $0.75. Also, 172 Business Finance Essentials the risk-free rate of interest is 5% and the expected return on the market is 12%. Beta for this stock is 0.8. Finally, we estimate a risk premium of 5% for stocks relative to bonds and the current YTM on our long-term debt is 9%. Find the estimated cost of capital for common stock under each of the 3 methods.
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