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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
3.       Calculating Cost of Equity   Stock in Dragula Industries has a beta of 1.1. The market risk premium is 7 percent, and T-bills are currently yielding 4.5 percent. The company’s most recent dividend was $1.70 per share, and dividends are expected to grow at a 6 percent annual rate indefinitely. If the stock sells for
$39 per share, what is your best estimate of the company’s cost of equity?
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