Stock in cdb industries has a beta of 109 the market risk, Financial Management

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Stock in cdb industries has a beta of 109 the market risk

Calculating Cost of Equity

Stock in CDB Industries has a beta of 1.09. The market risk premium is 7.4 percent, and T-bills are currently yielding 4.4 percent. CDB’s most recent dividend was $3.30 per share, and dividends are expected to grow at an annual rate of 5.4 percent indefinitely.

If the stock sells for $55 per share, what is your best estimate of the company's cost of equity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Cost of equity %

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