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  3. a company has an interest rate on long-term debt o

A company has an interest rate on long-term debt of 7%. Suppose the risk premium...

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Finance

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A company has an interest rate on long-term debt of 7%. Suppose the risk premium is estimated to be 2.5%. What is the company's cost of equity? 17.5% 4.5% 9.5% Suppose a company's stock sells for $65, next year's dividend will be $3.25, expected ROE is 20%, and the company is expected to payout 45% of its earnings. What is the company's cost of equity? 14% 11% 16%

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