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Year

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
CAGR

EPS
1.56
1.5
1.25
1.57
1.86
1.79
1.73
1.95
2.13
2.36
4%

DPS
0.765
0.84
0.92
1
1.08
1.16
1.24
1.32
1.4
1.495
7%

Return on Equity as per Gordon Growth Model


Current Stock Price
25.75
Cost of Equity
13.14%
Return on Equity as per CAPM
Beta
Risk free rate
Return on market
Cost of Equity

Average Cost of Equity

0.7
6%
20%
16%

14.47%

Capital Source
Long-Term Debt
Preferred Stock
Common Equity
Total Capital

Amount
$675
555
877
$2,107

Weight
32%
26%
42%
100%

Particulars

% age

Amount
employed

Cost
9.60%
9.10%
14.47%

Cost of
Capital

Percentage employed in Regulated


business

85.15% $1,794.11

11.49%

Percentage employed in NonRegulated business

14.85%

11.49%

$312.89

Cost of Capital
3.08%
2.40%
6.02%
11.49%

Total Cost
of Capital

Risk premium
0

11.49%

2%

13.49%

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