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What would the firm cost of equity

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Question - A firm's earnings, dividends and stock price will grow at 5% in the near future. Current stock price is $25.00. Its last dividend was $2.00.  The firm will pay a dividend of $2.10 at the end of the current year.

Using the discounted cash flow method, what is the cost of equity?

If the firm's beta is 1.5, the risk free rate is 4%, and the expected market return is 10%, then what would the firm's cost of equity be based on the CAPM approach?

Reference no: EM133118507

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