Calculate huldi cost of equity using dividend growth model

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Huldi Manufacturers shares have a beta of 1,40. At present government bonds/treasury bills present a return of 6% and the market return is 12 %. Huldi's dividend was R2,20 per share last year and they expect dividends to grow at 5%. Their shares sell for R30 per share at present (par value R20).

Question 1: Calculate Huldi's cost of equity using:

The Dividend Growth Model
The Capital Assets Pricing Model

Reference no: EM132928110

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