Stock in Country Road Industries has a beta of 0.97. The market risk premium is 10% while T-bills are currently yielding 5.5%. Country Road's most recent dividend was P1.70 per share, and dividends are expected to grow at a 7% annual rate indefinitely. The stock sells for $32 a share. What is the estimated cost of equity using the CAPM?

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Stock in Country Road Industries has a beta of 0.97. The market risk premium is 10% while T-bills are currently yielding 5.5%. Country Road's most recent dividend was P1.70 per share, and dividends are expected to grow at a 7% annual rate indefinitely. The stock sells for $32 a share. What is the estimated cost of equity using the CAPM?
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