Floyd Industries stock has a beta of 1.30. The company has just paid a dividend of $0.30, and the dividend is expected to grow by 4 percent per year. The expected return in the market is 13 percent and Treasury bills yield 4.8 percent. Floyd's most recent stock price is $65.

to. Calculate the cost of capital using the DDM method.

b. Calculate the cost of capital using the SML method.

Answer rating: 100% (QA)

a To calculate the cost of capital using the dividend discount model DDM we can use the following ... View the full answer