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What is the cost of equity

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The beta of Undugu Ltd. Is 1.5 and the market risk premium is 10%. The Treasury bill rate is 5.5%. The last dividend paid was sh. 3.5 per share and the dividend is expected to grow at a rate of 5% in perpetuity. If the stock sells at sh. 40 what is the cost of equity using:

1. CAPM

2. Growth model

Reference no: EM132607384

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