Cost of Equity
An organization's cost of equity can be calculated in a variety of
ways.
Complete the following tasks:
• Locate ten organizations that currently pay a
common stock cash dividend. Go to the Finance Web link provided
in the Webliography, enter the ticker symbol of an S&P 500
company in the quote box, and see whether it indicates that the company pays a
dividend.
• Calculate the organizations' cost of equity
using the dividend yield plus growth rate approach and the security market line
(SML) model approach.
• For each organization, show how the cost of equity differs based on the two
approaches.
Refer to the Web link Finance in the
Webliography for information on beta of stocks.
Submit your answers in a 2- to 3-page Microsoft Word document and
your calculations in a Microsoft Excel sheet.
An organization's cost of equity can be calculated in a variety of
ways.
Complete the following tasks:
• Locate ten organizations that currently pay a
common stock cash dividend. Go to the Finance Web link provided
in the Webliography, enter the ticker symbol of an S&P 500
company in the quote box, and see whether it indicates that the company pays a
dividend.
• Calculate the organizations' cost of equity
using the dividend yield plus growth rate approach and the security market line
(SML) model approach.
• For each organization, show how the cost of equity differs based on the two
approaches.
Refer to the Web link Finance in the
Webliography for information on beta of stocks.
Submit your answers in a 2- to 3-page Microsoft Word document and
your calculations in a Microsoft Excel sheet.
