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If the stock sells for 36 per share what is your best

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Stock in Dragula Industries has a beta of 1.2. The market risk premium is 6 percent, and T-bills are currently yielding 4.90 percent. The company's most recent dividend was $1.30 per share, and dividends are expected to grow at a 8.0 percent annual rate indefinitely.

If the stock sells for $36 per share, what is your best estimate of the company's cost of equity?

Reference no: EM13572161

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