Best estimate of the company cost of equity

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Stock in Dragula Industries has a beta of 1.2. The market risk premium is 9 percent, and T-bills are currently yielding 4.60 percent. The company’s most recent dividend was $1.80 per share, and dividends are expected to grow at a 8.0 percent annual rate indefinitely. If the stock sells for $36 per share, what is your best estimate of the company’s cost of equity? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)

Reference no: EM131179069

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