Stock in ABC Enterprises has a beta of 1.28. The market risk premium is 7.4%, and T-Bills are currently yielding 3.6%. ABCs most recently paid dividend was $1.62 per share, and dividends are expected to grow at an annual rate of 2% indefinitely. If the stock sells for $38 a share, what is your best estimate of ABC's cost of equity?
Answer Best estimate of ABC's cost of equity = Average of both... View the full answer