Stock in dragula industries has a beta of 16 the market, Ask an Expert

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Stock in Dragula Industries has a beta of 1.6. The market risk premium is 6 percent, and T-bills are currently yielding 5.50 percent. The company's most recent dividend was $1.90 per share, and dividends are expected to grow at a 7.0 percent annual rate indefinitely.

Question:

If the stock sells for $38 per share, what is your best estimate of the company's cost of equity?

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