1a )Booher Book Stores has a beta of 0.6. The yield on a 3-month T-bill is 4% and the yield on a 10-year T-bond is 7%. The market risk premium is 7.5%, and the return on an average stock in the market last year was 14%. What is the estimated cost of common equity using the CAPM? Round your answer to two decimal places.

1b) common stock is currently trading at $22 a share. The stock is expected to pay a dividend of $2.50 a share at the end of the year (D₁ = $2.50), and the dividend is expected to grow at a constant rate of 4% a year. What is the cost of common equity? Round your answer to two decimal places.