IRQ has common stock outstanding, which is trading at $25 per share. IRQ paid a dividend yesterday of $2.22 per share. The dividends are expected to grow at 3%. Their beta is 1.32 The current risk-rate is 3.24% The market risk premium is 6.75% What is the estimate of the cost of common equity (retained earnings)?

IRQ has common stock outstanding, which is trading at $25 per share. IRQ paid a dividend yesterday of $2.22 per share. The dividends are expected to grow at 3%. Their beta is 1.32 The current risk-rate is 3.24% The market risk premium is 6.75% What is the estimate of the cost of common equity (retained earnings)?

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter9: The Cost Of Capital

Section: Chapter Questions

Problem 5P

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