Use the Following Information to Answer the Following Question(s)

question 106

Multiple Choice

Use the following information to answer the following question(s) .
Berlioz Inc.is trying to estimate its cost of ordinary equity,and it has the following information.The firm has a beta of 0.90,the before-tax cost of the firm's debt is 7.75%,and the firm estimates that the risk-free rate is 4% while the current market return is 12%.Berlioz shares currently sell for $35.00 per share.The firm pays dividends annually and expects dividends to grow at a constant rate of 5% indefinitely.The most recent dividend per share,paid yesterday,is $2.00.Finally,the firm has a marginal tax rate of 34%.
-The cost of ordinary equity using the CAPM is

• A)11.00%.
• B)11.20%.
• C)11.50%.
• D)11.72%.

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Definitions:

Workplace Criticism

Workplace criticism involves giving feedback or evaluations about an individual's performance or behavior in a professional setting, often aimed at improvement.

Professional Behavior

Conduct that is considered acceptable and appropriate in a workplace or professional setting.

Reliable

Capable of being trusted or depended upon; consistently good in quality or performance.

Diligent

Showing careful and persistent work or effort in one's duties or tasks.