Question: My company's stock is now selling for $40 a share. The stock is expected to pay $2 dividend at the end of the year. The stock's dividend is expected to grow at a constant rate of 7% a year forever. The risk-free rate is 6% and the market risk premium is also 6%. What is the stock's beta?© BrainMass Inc. brainmass.com June 3, 2020, 9:11 pm ad1c9bdddf
Cost of equity = Rf + Market risk premium X beta
To calculate the beta, we need the ...
Using the CAPM equation, this solution illustrates how to calculate the beta of the stock. All steps and variables which are required are outlined.