Stock in cdb industries has a beta of 1.14. the market risk premium is 7.4 percent, and t-bills are currently yielding 4.4 percent. the most recent dividend was $3.80 per share, and dividends are expected to grow at an annual rate of 5.4 percent indefinitely. the stock sells for $60 per share. using the capm, what is your estimate of the company's cost of equity?

7.82%

Explanation:

In CAPM (capital asset pricing model), cost of equity = Risk free rate of return + Beta × (market rate of return – risk free rate of return)

T-bill is treasury bill backed up by governement, then cosidered is risk free rate.

Using the CAPM, the company's cost of equity = T-bills yielding 4.4% + beta 1.14 x (market risk premium 7.4% -  T-bills yielding 4.4%)

= 4.4% +1.14*(7.4%-4.4%) = 7.82%

-the personal ownership of property

-the influence of consumer demand

explanation:

the command economy prohibits the personal ownership of property.

basically, command economy is defined as the system where a nation’s government is the one that makes all the decisions when it comes to its economy. the government is the one who controls the production of goods and services and regulates the prices and salaries.

therefore, since that the government is the authority, then all kinds of personal ownership of property is prohibited by them.