Which it has pledged to increase at an annual rate of 310


Stock currently sells for $68.25 per share and has a beta of .85. The market risk premium is 7.10 percent and the risk-free rate is 2.85 percent annually. A company just paid a dividend of $3.45 per share, which it has pledged to increase at an annual rate of 3.10 percent indefinitely. What is your best estimate of the company's cost of equity?

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Finance Basics: Which it has pledged to increase at an annual rate of 310
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