Cost of equity using the dividend growth model method

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Reference no: EM13942111

Laverne Industries stock has a beta of 1.32. The company just paid a dividend of $.82, and the dividends are expected to grow at 5.2 percent. The expected return of the market is 11.7 percent, and Treasury bills are yielding 5.2 percent. The most recent stock price is $82.75.

A. Calculate the cost of equity using the dividend growth model method.

B. Calculate the cost of equity using the SML method.

Reference no: EM13942111

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Cost of equity using the dividend growth model method : Laverne Industries stock has a beta of 1.32. The company just paid a dividend of $.82, and the dividends are expected to grow at 5.2 percent. The expected return of the market is 11.7 percent, and Treasury bills are yielding 5.2 percent. The most rec..

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