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Estimate of the company cost of equity

Problem: Stock of CCC Industries has a beta of 1.1. The market risk premium is 7 percent, and T-Bills are currently yielding 4.5 percent. The company's most recent dividend was $1.70 per share, and dividends are expected to grow at a 6 percent annual rate indefinitely. If the stock sells for $39 per share, what is your best estimate of the company's cost of equity?

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Prepared by a verified Expert

Finance Basics: Estimate of the company cost of equity

Reference No:- TGS01449595

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

Q : Review the financial ratios

Q : Factors in deciding whether to replace an asset or not

Q : Analyzing the possible acquisition of teller company

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Q : Estimate of the company cost of equity

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Estimate of the company cost of equity

Reference No:- TGS01449595

Recent Questions Asked Finance Basics

Q : Review the financial ratios

Q : Factors in deciding whether to replace an asset or not

Q : Analyzing the possible acquisition of teller company

Q : Calculating npv-fcf-wacc

Q : Estimate of the company cost of equity

Q : Net salvage value

Q : How can open systems theory might apply to usaa

Q : Australian prudential regulation authority

Q : Financial management issues today

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