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Business, 26.06.2021 19:10 china236

Sony Industries stock has a beta of 1.5. The company just paid a dividend of $20, and the dividends are expected to grow at 5 percent. The expected return on the market is 12 percent, a dn Treasury bills are yielding 5.5 percent. The most recent stock price for Sony is $72. a. Calculate the cost of equity using DCF method.
b. Calculate the cost of equity using SML method.
c. Why do you think your extimates in (a) and (b) are so different?

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