Calculate the cost of equity using the DDM method

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Reference no: EM13941759

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 6.0 percent. The most recent stock price for Floyd is $77.

a. Calculate the cost of equity using the DDM method. (Round your answer to 2 decimal places. (e.g., 32.16))

DCF method %

b. Calculate the cost of equity using the SML method. (Round your answer to 2 decimal places. (e.g., 32.16))

SML method %

Reference no: EM13941759

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