ackenzie
Company has a price of
$31.7831.78
and will issue a dividend of
$1.851.85
next year. It has a beta of
1.191.19,
the risk-free rate is
5.05 %5.05%,
and the market risk premium is estimated to be
4.87 %4.87%.
a. Estimate the equity cost of capital for
MackenzieMackenzie.
b. Under the CDGM, at what rate do you need to expect
MackenzieMackenzie's
dividends to grow to get the same equity cost of capital as in part
(a)?
Question content area bottom
Part 1
a. Estimate the equity cost of capital for
MackenzieMackenzie.
The equity cost of capital for
MackenzieMackenzie
is
enter your response here%.
(Round to two decimal places.)