Calculate the cost of equity using the ddm method

Reference no: EM13273705

Floyd Industries stock has a beta of 1.30. The company just paid a dividend of $.30, and the dividends are expected to grow at 4 percent per year. The expected return on the market is 13 percent, and Treasury bills are yielding 4.8 percent. The most recent stock price for Floyd is $65.

a. Calculate the cost of equity using the DDM method.
b. Calculate the cost of equity using the SML method.

Reference no: EM13273705

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