Your corp incrsquos data is as followsbeta 130recent, Ask an Expert

Finance

Your Corp, Inc.’s data is as follows:

Beta; 1.30

Recent dividend; $.90

Expected dividend growth; 7%

Expected return of the market; 14%

Treasury Bills are yielding; 4%

Most recent stock price; $65

Problem 7-4(continued)

A] Using the DCF method, calculate the cost of equity.

B] Using the SML method, calculate the cost of equity.

C] The answers in [A] and [B] are very different. Why?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91380540

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