Compute the cost of common equity

Reference no: EM13282221

Eaton Electronic Companys treasurer uses both the capital asset pricing model and the dividend valuation model to compute the cost of common equity (Also referred to as the required rate of return for common equity)

Assume:
Rf=6%
Km=9%
B=2.2
D1=$.70
Po=$15
g=6%

a. Compute Ki (%)

b. Compute Ke (%)

Reference no: EM13282221

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