What is your estimate of CDBs cost of equity

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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. The stock sells for $47 per share. Required: Using the CAPM, what is your estimate of CDB’s cost of equity? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Cost of equity % Using the dividend discount model, what is your estimate of CDB’s cost of equity? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Cost of equity % What is your best estimate of CDB’s cost of equity? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Cost of equity %

Reference no: EM131552980

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