What is your best estimate of CDBs cost of equity

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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? (Do not include the percent sign (%). Round your answer to 2 decimal places (e.g., 32.16).)

Reference no: EM13917817

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