The current treasury bill rate is 1 and the expected return


Mulligan’s Used Golf Balls (MUGB) is a fairly risky company with a beta of 2.2. The current Treasury bill rate is 1% and the expected return on the S&P500 is 11%. What is the required rate of return (or cost of equity) for MUGB stock?

Using the information from problem #5. MUGB expects to pay a dividend of $2.00 per share exactly 1 year from today and expects dividends to grow 3% annually. What is the value of a share of MUGB stock?

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Financial Management: The current treasury bill rate is 1 and the expected return
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