Econnec CSUSB-Fin-314-Llu: CSU 2018-MW-10am-Liu FINANCE rk 3 Due on June 11th be

Question

Econnec CSUSB-Fin-314-Llu: CSU 2018-MW-10am-Liu FINANCE rk 3 Due on June 11th before Midnight Question 3 (of 10) value 10.00 points P14-3 Calculating Cost of Equity [Lo1 Stock in Country Road Industries has a beta of 0.81. The market risk premium is 10 percent, and T-bills are currently yielding 4.5 percent. The company's most recent dividend was $1.7 per share, and dividends are expected to grow at a 5.5 percent annual rate indefinitely. If the stock sells for $32 per share, what is your best estimate of the company's cost of equity? (Do not round your Intermediate calculations) 8.96% 12.6% 11.85% 113% 10.23% ?11

Explanation / Answer

working:

11.85%

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