What is your best estimate of abcs cost of equity

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Reference no: EM131460520

Stock in ABC Enterprises has a beta of 1.28. The market risk premium is 7.4 percent, and T-bills are currently yielding 3.6 percent. ABC's most recently paid dividend was $1.62 per share, and dividends are expected to grow at an annual rate of 2 percent indefinitely. If the stock sells for $38 a share, what is your best estimate of ABC's cost of equity?

a. 9.78 percent b. 7.82 percent c. 9.71 percent d. 9.41 percent e. 7.41 percent

Reference no: EM131460520

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