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Galina-37 [17]
3 years ago
15

Donut delites has a beta of 1.06, a dividend growth rate of 3.2 percent, a stock price of $12 a share, and an expected annual di

vidend of $.84 per share next year. the market rate of return is 11.4 percent and the risk-free rate is 3.8 percent. what is the firm's cost of equity?
Business
1 answer:
Leto [7]3 years ago
3 0
<span>RE = .038 + 1.06(.114-.038) = .11856 ; RE = ($.68/$12) + .012 = .06867 ; Average RE = (.11856 + .06867)/2 = .0936, or 9.36 percent</span>
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Answer:

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