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If the stock sells for 38 a share what is your best

Stock in ABC Enterprises has a beta of 1.28. The market risk premium is 7.4 percent, and T-bills are currently yielding 3.6 percent. ABC's most recently paid dividend was $1.62 per share, and dividends are expected to grow at an annual rate of 2 percent indefinitely.

If the stock sells for $38 a share, what is your best estimate of ABC's cost of equity?

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Financial Management: If the stock sells for 38 a share what is your best

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