Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN: 9781337690881
Author: Jay Rich, Jeff Jones
Publisher: Cengage Learning
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General accounting

McCliffs has the following parameters related to its
stock and firm.
Beta
Recent Dividend
1.1
1.05 dollars
Dividend Growth Rate
4.5 percent
Expected return on market
11.0 percent
Treasury Bills Yield
4.3 percent
Most recent stock price
64.00 dollars
What is the cost of equity using DDM? What is the
cost of equity using SML?
a. 6.21 percent
b. 11.67 percent
c. 6.01 percent
d. 7.37 percent
e. 4.5 percent
f. 11.00 percent
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Transcribed Image Text:McCliffs has the following parameters related to its stock and firm. Beta Recent Dividend 1.1 1.05 dollars Dividend Growth Rate 4.5 percent Expected return on market 11.0 percent Treasury Bills Yield 4.3 percent Most recent stock price 64.00 dollars What is the cost of equity using DDM? What is the cost of equity using SML? a. 6.21 percent b. 11.67 percent c. 6.01 percent d. 7.37 percent e. 4.5 percent f. 11.00 percent
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