McCliffs has the following parameters related to its stock and firm. Beta Recent Dividend 1.1 Dividend Growth Rate Expected return on market Treasury Bills Yield Most recent stock price 1.05 dollars 4.5 percent 11.0 percent 4.3 percent 64.00 dollars What is the cost of equity using DDM? What is the cost of equity using SML? a. 6.21 percent b. 11.67 percent c. 6.01 percent d. 7.37 percent e. 4.5 percent f. 11.00 percent

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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McCliffs has the following parameters related to its
stock and firm.
Beta
Recent Dividend
1.1
Dividend Growth Rate
Expected return on market
Treasury Bills Yield
Most recent stock price
1.05 dollars
4.5 percent
11.0 percent
4.3 percent
64.00 dollars
What is the cost of equity using DDM? What is the
cost of equity using SML?
a. 6.21 percent
b. 11.67 percent
c. 6.01 percent
d. 7.37 percent
e. 4.5 percent
f. 11.00 percent
Transcribed Image Text:McCliffs has the following parameters related to its stock and firm. Beta Recent Dividend 1.1 Dividend Growth Rate Expected return on market Treasury Bills Yield Most recent stock price 1.05 dollars 4.5 percent 11.0 percent 4.3 percent 64.00 dollars What is the cost of equity using DDM? What is the cost of equity using SML? a. 6.21 percent b. 11.67 percent c. 6.01 percent d. 7.37 percent e. 4.5 percent f. 11.00 percent
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