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    Estimating cost of equity using the dividend growth model

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    Please help me figure out how to do this practice assignment. I only have 3 hours to learn it before I take an exam that covers similar material. Thanks. The questions are about cost of equity, CAPM and bond premium method.

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    Pg 389
    (9-10)
    Cost of Equity
    The earnings, dividends, and stock price of Shelby Inc. are expected to grow at 7% per year in the future. Shelby's common stock sells for $23 per share, its last dividend was $2.00, and the company will pay a dividend of $2.14 at the end of the ...

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    Solution helps in estimating Cost of equity, CAPM and bond premium method.

    $2.19