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Calculate the cost of equity using the ddm method

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Reference no: EM132034380

Floyd Industries stock has a beta of 1.69. The company just paid a dividend of $0.85, and the dividends are expected to grow at 7 percent. The expected return of the market is 16 percent, and Treasury bills are yielding 7 percent. The most recent stock price for Floyd is $57.

1. Calculate the cost of equity using the DDM method.

2. Calculate the cost of equity using the SML method.

Reference no: EM132034380

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