What is your best estimate of the company cost of equity

Reference no: EM13281129

Stock in Dragula Industries has a beta of 1.1. The market risk premium is 7 percent, and T-bills are currently yielding 5.20 percent. The company's most recent dividend was $1.60 per share, and dividends are expected to grow at a 6.0 percent annual rate indefinitely.

If the stock sells for $40 per share, what is your best estimate of the company's cost of equity?

Reference no: EM13281129

Questions Cloud

What color code does the res istor probably have : A circuit similar to the one you will b e measuring has a current of 0.1 A flowing when the voltage is 2. 5 V, What color code does the res istor probably have

Find the probability that failure involves a gas leak : A maintenance firm has gathered the following information regarding the failure mechanisms for air conditioning systems:The units without evidence of gas leaks or electrical failure showed other types of failure. If this is a representative sample o..

Perform a factorial anova data set : Give a one to two paragraph write up of the data once you have done - create an APA style table that presents descriptive statistics for the sample. and factorial ANOVA. Perform a factorial ANOVA data set.

A beam of circular cross-section of diameter : A beam of circular cross-section of diameter d is subjected to a direct compressive axial ioad and an eccentric compressive load of ecentricity e,in order that the tensile stress induced is zero,find the limiting region for application of the load sh..

What is your best estimate of the company cost of equity : If the stock sells for $40 per share, what is your best estimate of the company's cost of equity?

Explain the amount of product formed in the reaction mixture : the amount of product formed in the reaction mixture was 12 micro-moles. If, in a separate experiment, one-third as much enzyme and twice as much substrate had been combined, how long would it take for the same amount (12 micro-moles) of product t..

Find center distance-contact ratio and resultant forces : A gear set has a pinion with 20 teeth and a gear with 40 teeth ,the pinion runs at 30 rev/s and transmit a power of 20 kw,the teeth are on the 20 full depth systems and have a module of 5 mm ,the length of line of action is 19mm find center distance,..

Calculate the angular speed of the turntable : A turntable with a moment of inertia of 4.8 kg Â· m2 rotates freely with an angular speed of 33 1/3 rpm. Calculate the angular speed of the turntable

What is the probability that will not see the same design : A web ad can Be designed from four different colors, three font types, five font sizes, three images and five test phrases. A specific design is randomly generated By the web server when you visit the site.

User Account

All Pages