Compute the firms cost of equity

Reference no: EM1361062

The earnings, dividends, and stock price of Cattle Technologies Inc. are expected to grow at 8% per year in the future. Cattle's common stock sells for $30 per share, its last dividend was $3.00, and the company will pay a dividend of $3.24 at the end of the current year.

Using the discounted cash flow approach, what is its cost of equity?

If the firm's beta is 1.25, the risk-free rate is 6%, and the expected return on the market is 14%, what will be the firm's cost of equity using the CAPM approach?

Reference no: EM1361062

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