Rossdale Co. stock currently sells for $73.31 per share and has a beta of 1.24. The...

Rossdale Co. stock currently sells for $73.31 per share and has a beta of 1.24. The market risk premium is 6.90 percent and the risk-free rate is 2.82 percent annually. The company just paid a dividend of $4.37 per share, which it has pledged to increase at an annual rate of 3.25 percent indefinitely. What is your best estimate of the company's cost of equity?

Multiple Choice

9.13%
9.53%
7.88%
10.39%
11.19%

Expert Solution

jeff jeffy answered 1 month ago

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