You are valuing a private firm and need to estimate its cost of equity. Assume a risk-free rate of 4 percent, ex- pected market return of 9 percent, the firm's CAPM beta is 1.4, a risk premium to account for the firm's size is 2 percent, and a risk premium for specific-firm factors is 3 percent. 

Required 

Estimate the firm's cost of equity using the modified CAPM and build-up methodologies using only this information.