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Suppose your company has a beta of 1.5. The market risk premium is expected to be 9% and the current risk-free rate is 3%. We have used analysts' estimates to determine that the market believes our dividends will grow at 5% per year and our last dividend was $2.5. Our stock is currently selling for $45. What's the cost of equity under the CAPM?

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Financial Management, Finance

Category:- Financial Management
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