Question: Please show all work and make sure the answer is A,B, or C below. Thanks Riddle Industries has the following parameters related to its stock
Please show all work and make sure the answer is A,B, or C below. Thanks
Riddle Industries has the following parameters related to its stock and firm.
Beta: 1.5 Recent Dividend 0.75 dollars Dividend Growth Rate 4.5 percent Expected return on market 12.5 percent Treasury Bills Yield 4.3 percent Most recent stock price 64.00 dollars
What is the cost of equity using DDM? What is the cost of equity using SML?
A.) 5.72 percent, 16.60 percent
B.) 5.52 percent, 12.30 percent
C.) 4.5 percent, 12.50 percent
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