Using capm approach to find cost of common stock

Reference no: EM1344379

You are trying to calculate the value of a preferred stock you are examining. This preferred stock has an annual dividend of $5 per share and a par value of $30. If the required return on this stock is currently 20 percent, what should be the stock's market value?

The common stock of Ladeso Inc. has a beta of 1.20. The risk-free rate is 5 percent and the market risk premium is 6 percent. What is the company's cost of common stock using the CAPM approach?

Reference no: EM1344379

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Using capm approach to find cost of common stock : You are trying to compute the price of a preferred stock you are examining. This preferred stock has an yearly dividend of $5 per share and a par value of $30.

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