dividends are expected to grow at a constant rate


Dividends are expected to grow at a constant rate of 5 percent per year in the future. Firms last dividend was $1 and stock price 10 dollars the firms beta 1,2 the rate of return on 20 year t-bonds currently 8percent and the expected rate of return on the market as reported on by a large financial services firm is 14 percent for 60percent debt finance ing the interest rate required its new debt is 9 percent and the firms tax rate is 30 percent. what is the firms cost of equity estimates according to the DCF method.on what is the cost of equity estimate according to the CAPM? What is your estimatefor the firm coporate cost of capital

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Financial Management: dividends are expected to grow at a constant rate
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