Question: please help with both A&B. If unable to answer both questions please do not reply Floyd Industries stock has a beta of 1.25. The company
Floyd Industries stock has a beta of 1.25. The company just paid a dividend of $.40 and the dividends are expected to grow at 5 percent per year. The expected return on the market is 12 percent, and Treasury bills are yielding 4.7 percent. The most recent stock price for the company is $64. a. Calculate the cost of equity using the dividend growth method. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the cost of equity using the SML method. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) % a. DGM model b. SML method %
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