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Example - Cost of Equitity Suppose our company has a teta of 1.5....

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Finance

Example - Cost of Equitity
Suppose our company has a teta of 1.5. The market risk
premium is expected to be 9% and the current risk-free
rate is 6%. We have used analysts' estimates to
determine that the market believes our dividends will
grow at 6% per year and our last dividend was $2. Our
stock is currently selling for $15.65. What is our cost of
equity?I'm
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