Donut Delites has a beta of 1.06,a dividend growth rate of 1.2 percent,a stock price of $12a share,and an expected annual dividend of $.68 per share next year.The market rate of return is 11.4 percent and the risk-free rate is 3.8 percent.What is the firm's cost of equity?
A) 7.74 percent
B) 9.36 percent
C) 9.30 percent
D) 9.72 percent
E) 7.46 percent
Correct Answer:
Verified
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