Calculate the cost of equity using the given method

Assignment Help Finance Basics

Reference no: EM131970592

Question: Epley Industries stock has a beta of 1.20. The company just paid an annual dividend of $.50, and the dividends are expected to grow at 6 percent. The expected return on the market is 11 percent, and Treasury bills are yielding 6.2 percent. The most recent stock price for the company is $79.

Calculate the cost of equity using the discounted cash flow method (Chapter 6). (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

DCF method _ %

Calculate the cost of equity using the Security Market Line (Chapter 13). (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

SML method _ %

Reference no: EM131970592

Questions Cloud

What amount must person now commit to the membership : To join an upscale country club, an individual must first purchase a membership bond for $23,000. In addition, monthly membership dues are $270.

Discuss the changes in reporting requirement rsi now require : Describe this requirement and discuss the changes in reporting requirements RSI now requires of state and local governments.

Should you undertake this trip or just stay home : Assume it will take you exactly one year to get to Tucson (the mare is very slow). Should you undertake this trip, or just stay home?

Research the related generally accepted accounting principle : Research the related generally accepted accounting principles and prepare a short memo to the president that answers her question.

Calculate the cost of equity using the given method : Calculate the cost of equity using the discounted cash flow method (Chapter 6). (Do not round intermediate calculations. Enter your answer as a percent rounded)

Calculate the net sales needed to produce net income : Cost of goods sold is expected to be 60 percent of net sales, depreciation and other operating expenses are not expected to change.

What is the present value of the package : As a result of a slowdown in operations, Tradewind Stores is offering. What is the present value of the package assuming an interest rate of 11 percent?

Do you agree with the given arrangement : The Environment Protection Agency sometimes imposes penalties on firms that pollute the environment. A mechanism that has been developed to limited excessive.

Discrete and continuous random variables : The following table provides a probability distribution for the random variable x.

User Account

All Pages