Calculate the cost of equity using the sml method

Reference no: EM13273306

Berta Industries stock has a beta of 1.20. The company just paid a dividend of $0.50, and the dividends are expected to grow at 6 percent. The expected return on the market is 11 percent, and Treasury bills are yielding 5.6 percent. The most recent stock price for Berta is $73.

a. Calculate the cost of equity using the DCF method.

b. Calculate the cost of equity using the SML method

Reference no: EM13273306

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