What is your best estimate of the company cost of equity

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Reference no: EM131881970

Stock in Country Road Industries has a beta of 0.9. The market risk premium is 8 percent, and T-bills are currently yielding 3.5 percent. The company's most recent dividend was $2 per share, and dividends are expected to grow at a 4.5 percent annual rate indefinitely. If the stock sells for $40 per share, what is your best estimate of the company's cost of equity? (Do not round your intermediate calculations.)

Reference no: EM131881970

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