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What is the cost of equity-cox corporation

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The Cox Corporation's balance sheet shows that 1,000,000 shares of common stock are outstanding. Total assets are $26,000,000 and total debt is $10,000,000. The marginal corporate tax rate is 30%. Assume the company's stock trades at $20/share. The next dividend is expected to be $1 and long-term growth is estimated at 5%. Assume that all of the Cox Corporation's debt stems from 8% coupon rate bonds that are trading so that their YTM is 9%. What is the cost of equity?

Reference no: EM133056563

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