Makes electronic entertainment systems

Assignment Help Financial Management

Reference no: EM132034570

Bunkhouse Electronics is a recently incorporated firm that makes electronic entertainment systems. Its earnings and dividends have been growing at a rate of 37.0%, and the current dividend yield is 9.00%. Its beta is 1.34, the market risk premium is 15.00%, and the risk-free rate is 2.60%.

a. Use the CAPM to estimate the firm’s cost of equity. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Reference no: EM132034570

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