What is your best estimate of CDBs cost of equity

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Reference no: EM13943197

Stock in CDB Industries has a beta of .96. The market risk premium is 7.1 percent, and T-bills are currently yielding 4.1 percent. CDB’s most recent dividend was $2.50 per share, and dividends are expected to grow at a 5.1 percent annual rate indefinitely. Required: If the stock sells for $47 per share, what is your best estimate of CDB’s cost of equity?

Reference no: EM13943197

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