Problemstock in cdb industries has a beta of 113 the market, Ask an Expert

Accounting

Problem:

Stock in CDB Industries has a beta of 1.13. The market risk premium is 7.3 percent, and T-bills are currently yielding 4.3 percent. CDB's most recent dividend was $3.70 per share, and dividends are expected to grow at a 5.3 percent annual rate indefinitely.

Required:

If the stock sells for $59 per share, what is your best estimate of CDB's cost of equity?

Note: Please answer in proper manner and show all computations

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91167714

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