Stock financing based on the dividend valuation approach

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Reference no: EM132049024

Please give me instructions how to calculate this with a TI-BAII

You have gathered the following information about your firm:

Current Stock Price (Common) ==> $36

Forecasted Dividend (D1) ==> $2.01

Beta ==> 1.4

YTM on Debt ==> 9.59%

Coupon Rate on Debt ==> 5.86%

Treasury Bond Yield ==> 5.21%

Growth Rate on Dividends ==> 3.1%

Market Risk Premium (km - krf) ==> 5.1%

Risk Premium for our stock over our bonds ==> 5.8%

Based on this, estimate the cost of common stock financing based on the dividend valuation approach. Round to 2 decimal places in percentage terms.

Reference no: EM132049024

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