Calculate the cost of equity using the sml method

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Reference no: EM13940288

Berta Industries stock has a beta of 1.25. The company just paid a dividend of $0.40, and the dividends are expected to grow at 5 percent. The expected return on the market is 12 percent, and Treasury bills are yielding 6.1 percent. The most recent stock price for Berta is $78.

a. Calculate the cost of equity using the DCF 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: EM13940288

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