1. The FCU Co. maintains a debt-equity ratio of 0.60 and has a tax rate of 21 percent. The firm does not issue preferred stock. The firm's pre-tax cost of debt is 8.75 percent. FCU Co. has 20,000 shares of stock outstanding with a beta of 0.9 and a market price of $30. The current market risk premium is 7 percent and the current risk-free rate is 3 percent. Last month, FCU Co. issued an annual dividend in the amount of $1.25 per share. Dividends are expected to grow at 2 percent indefinitely. (20 points) (a) Using the CAPM model to estimate the cost of equity. (b) Using the dividend discount model to estimate the cost of equity. (c) Using an average expected cost of equity, what is FCU's weighted average cost of capital