Using the discounted cash flow and dividend growth model

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Reference no: EM131859894

Answer the following questions regarding company RIM.

Consider the following information for company RIM:

Current market price per share $50.00

Most recent dividend paid per share $2.00

Expected dividend payout rate 50%

Return on equity 10%

Beta coefficient for common stock 1.00

Expected return on the market portfolio 9%

Return on government treasury bills 3%

Using the discounted cash flow/dividend growth model, what is the cost of equity capital for RIM?

Using the Capital Asset Pricing Model (CAPM) approach, what is the cost of equity capital for RIM?

Reference no: EM131859894

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