The beta of a company is 1.0, the return on the DOW Jones 14%, US treasury bills currently yield 8%, the company has historically maintained a growth rate of 5% in dividends and investors expect to receive a $2 dividend per share in the next year. Using the available data, what would Ke be?

Answer rating: 100% (QA)

calculate the companys cost of equity Ke using the Capital Asset Pricing Model CAPM and the Gordon ... View the full answer