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Pan American? Airlines' shares are currently trading at $57.56 each. The market yield on Pan? Am's...

Pan American? Airlines' shares are currently trading at $57.56 each. The market yield on Pan? Am's debt is 6?% and the? firm's beta is 0.6. The? T-Bill rate is 4.25?% and the expected return on the market is 8.25?%. The? company's target capital structure is 60?% debt and 40?% equity. Pan American Airlines pays a combined federal and state tax rate of 35?%. What is the estimated cost of common? equity, employing the constant growth dividend discount? model? Assume that Pan Am pays annual dividends and that the last dividend of ?$2.29 per share was paid yesterday. Pan Am started paying dividends 5 years ago. The first dividend was ?$1.59 per share.?

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jeff jeffy answered 2 years ago
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