Page 29 - FINAL CFA I SLIDES JUNE 2019 DAY 10
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Session Unit 10:
36. Cost of Capital
LOS 36.h: Calculate and interpret the cost of equity capital using the capital asset pricing model approach,
the dividend discount model approach, and the bond-yield-plus risk-premium approach., p.47
tanties
Example: p.48: Suppose Dexter’s stock sells for $21, next year’s
May need to dividend =$1; expected ROE = 12%, and Dexter is expected to pay out
solve for this, or any! 40% of its earnings. What is Dexter’s cost of equity?
