Estimate the companys cost of equity

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Reference no: EM131996399

Stock in CDB Industries has a beta of .92. The market risk premium is 7.2 percent, and T-bills are currently yielding 4.2 percent. CDB's most recent dividend was $2.10 per share, and dividends are expected to grow at an annual rate of 5.2 percent indefinitely.

If the stock sells for $43 per share, what is your best estimate of the company's cost of equity?

(Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Cost of equity %

Reference no: EM131996399

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