aux Corp Stock Over the Last 10 years - Beta = 1.1 - Market Risk premium = 10% - Current risk-free rate 3% - Last dividend $5 - Current Stock Price $30 Dividend History  2016 - $4.20 2017 - $4.40 2018 - $4.55 2019 - $4.75 2020 - $5.00 Dividend Growth Rate = 17.83% 1. Calculate the Cost of Equity using DGM

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
10th Edition
ISBN:9781337902571
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter8: Risk And Rates Of Return
Section: Chapter Questions
Problem 22SP
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Faux Corp Stock Over the Last 10 years

- Beta = 1.1

- Market Risk premium = 10%

- Current risk-free rate 3%

- Last dividend $5

- Current Stock Price $30

Dividend History 

2016 - $4.20

2017 - $4.40

2018 - $4.55

2019 - $4.75

2020 - $5.00

Dividend Growth Rate = 17.83%

1. Calculate the Cost of Equity using DGM

 

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