Problem:
Stock in CDB Industries has a beta of 1.13. The market risk premium is 7.3 percent, and T-bills are currently yielding 4.3 percent. CDB's most recent dividend was $3.70 per share, and dividends are expected to grow at a 5.3 percent annual rate indefinitely.
Required:
If the stock sells for $59 per share, what is your best estimate of CDB's cost of equity?
Note: Please answer in proper manner and show all computations