Malko Inc

Malko Inc - estimate the cost of equity based on the three...

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Malko Inc. hired you as a consultant to help them estimate their cost of capital. You have been provided with the following data. (1): r d = yield on the firm's bonds = 6.50% and risk premium over own debt cost = 4.00%. (2) r RF = 5.50%, RP M = 5.50%, and b = 0.9. (3) D 1 = $1.30; P 0 = $40.00 and g = 6.50% (constant). You were asked to
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Unformatted text preview: estimate the cost of equity based on the three most commonly used methods and then to indicate the difference between the highest and lowest of these estimates. What is this difference? Select the correct answer. 1.11%...
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This note was uploaded on 01/13/2011 for the course FIN 3331 taught by Professor Nowacki during the Spring '09 term at Troy.

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