Analysts expect twindles dividends to grow by at least 5


The risk free rate of return is 2% and the market risk premium is 10%. Twindle Industries has a beta of 1.5 and a standard deviation of returns of 18%. Twindle's marginal tax rate is 35%. Analyst's expect Twindle's dividends to grow by at least 5% per year for the next 5 years. Using the capital asset pricing model, what is Twindle's cost of retained earnings?

12%
13%
17%
14%

 

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Finance Basics: Analysts expect twindles dividends to grow by at least 5
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