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What is your best estimate of cdbs cost of equity

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Reference no: EM13261933

Stock in CDB Industries has a beta of 1.14. The market risk premium is 7.4 percent, and T-bills are currently yielding 4.4 percent. CDB's most recent dividend was $3.80 per share, and dividends are expected to grow at a 5.4 percent annual rate indefinitely.

Required:
If the stock sells for $60 per share, what is your best estimate of CDB's cost of equity?

 

Reference no: EM13261933

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