Stock in country road industries has a beta of 085 the, Ask an Expert

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Stock in Country Road Industries has a beta of 0.85. The market risk premium is 8.5 percent, and T-bills are currently yielding 4.5 percent. The company's most recent dividend was $1.8 per share, and dividends are expected to grow at a 5.5 percent annual rate indefinitely. If the stock sells for $40 per share, what is your best estimate of the company's cost of equity? (Do not round your intermediate calculations.)

a) 10.25%

b) 10.99%

c) 7.9%

d) 9.27%

e) 11.73%

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Financial Management, Finance

Category:- Financial Management
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