Steves specialties INC paid its dividend yesterday of $4.00. The dividend has been growing at a rate of 0.010 and is expected to contiue growing at that rate indefinatly. Steves common stock is currently trading at $22.00 per share. The firms beta is 0.96.
T billls are currently yielding 0.035
Average return on the market is 0.10.
Using CAPM what is the cost of retained earnings?