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?

Stock's beta is an measure to asses the volatility of stock price to the entire market. Beta can be either positive or negative, in which each situation will have a different implication. A positive beta implies that the stock price will tend to increase if the entire market is bullish.

Stock's beta is an measure to asses the volatility of stock price to the entire market. Beta can be either positive or negative, in which each situation will have a different implication. A positive beta implies that the stock price will tend to increase if the entire market is bullish.Answer and Explanation: 1

Stock's beta is an measure to asses the volatility of stock price to the entire market. Beta can be either positive or negative, in which each situation will have a different implication. A positive beta implies that the stock price will tend to increase if the entire market is bullish.Answer and Explanation: 1a. Estimate the cost of equity, using the DDM method:

Stock's beta is an measure to asses the volatility of stock price to the entire market. Beta can be either positive or negative, in which each situation will have a different implication. A positive beta implies that the stock price will tend to increase if the entire market is bullish.Answer and Explanation: 1a. Estimate the cost of equity, using the DDM method:b. Estimate the cost of equity, using the SML method:

Stock's beta is an measure to asses the volatility of stock price to the entire market. Beta can be either positive or negative, in which each situation will have a different implication. A positive beta implies that the stock price will tend to increase if the entire market is bullish.Answer and Explanation: 1a. Estimate the cost of equity, using the DDM method:b. Estimate the cost of equity, using the SML method:Cost of equity = Risk-free rate + (Market return - Risk-free rate) x beta

Stock's beta is an measure to asses the volatility of stock price to the entire market. Beta can be either positive or negative, in which each situation will have a different implication. A positive beta implies that the stock price will tend to increase if the entire market is bullish.Answer and Explanation: 1a. Estimate the cost of equity, using the DDM method:b. Estimate the cost of equity, using the SML method:Cost of equity = Risk-free rate + (Market return - Risk-free rate) x betaCost of equity = 6.3% + (13% - 6.3%) x 1.3

Stock's beta is an measure to asses the volatility of stock price to the entire market. Beta can be either positive or negative, in which each situation will have a different implication. A positive beta implies that the stock price will tend to increase if the entire market is bullish.Answer and Explanation: 1a. Estimate the cost of equity, using the DDM method:b. Estimate the cost of equity, using the SML method:Cost of equity = Risk-free rate + (Market return - Risk-free rate) x betaCost of equity = 6.3% + (13% - 6.3%) x 1.3Cost of equity = 15.01%

I have no idea abouts this

107x106 is the answer