Smith Technologies Corporation has a constant growth rate of 3% per year and its stock currently sells
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Smith Technologies Corporation has a constant growth rate of 3% per year and its stock currently sells for $27 a share.The last dividend was $1.50.The firm's beta is 1.3, the risk-free rate is 4%, and the average return on the market is 8%.Using the discounted cash flow method (or discounted dividend), what is the estimated cost of common equity?Using the CAPM approach, what is the estimated cost of common equity?
Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
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