What is the cost of equity

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Reference no: EM132036112

Question

Upper Roads is an all-equity financed firm. The beta is .75, the market risk premium is 8 percent, and the tax rate is 35 percent. The firm just issued its annual dividend of $1.42 per share and announced that future dividends will increase by 5 percent annually.

The stock sells for $27 a share. What is the cost of equity?

Reference no: EM132036112

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