1. Assume that you have been provided with the following data: D1 = $1.30; P0 = $42.50; and g = 5.0% (constant). What is the cost of equity based on the Dividend Growth Model?

A. 8.06%

B. 10.06%

C. 11.41%

D. 12.0%

2. To estimate the cost of capital, you have been provided with the following data: r_RF = 5.00%; the market return is 11.00%; and Beta = 1.0. Based on the CAPM approach, what is the cost of equity?

		5.0%
		6.0%
		10.4%
		11.0%