If the stock sells for 47 per share what is your best, Financial Management

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If the stock sells for 47 per share what is your best

Calculating Cost of Equity. Stock in CDB Industries has a beta of .90. The market risk premium is 7 percent, and T-bills are currently yielding 3.5 percent. CDB’s most recent dividend was $1.80 per share, and dividends are expected to grow at a 5 percent annual rate indefinitely. If the stock sells for $47 per share, what is your best estimate of CDB’s cost of equity? Please work out.

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Financial Management: If the stock sells for 47 per share what is your best

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