Calculating cost of equity stock in country road industries, Ask an Expert

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Calculating Cost of Equity Stock in Country Road Industries has a beta of .85. The market risk premium is 8 percent, and T- bills are currently yielding 5 percent. The company's most recent dividend was $ 1.60 per share, and dividends are expected to grow at a 6 percent annual rate indefinitely. If the stock sells for $ 37 per share, what is your best estimate of the company's cost of equity?

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