Estimate the cost of capital of a company given the


Estimate the cost of capital of a company given the following data:

Assume the SP500 is a proxy for the stock market.

The yield on the 10-year treasury note is 2.90%

The Sp500 forward P/E ratio is 22

Growth rate = 3.50%

The SP500's payout ratio = 80.00%

The company beta = 1.20

Assume the CAPM holds.

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Financial Management: Estimate the cost of capital of a company given the
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