3. COST OF EQUITY: Riskfree interest rate (XRP) = 3%; market rate of return (rm) = 10%; Beta (B) = 1.5. Using the CAPM, calculate cost of common equity (re). 4. COST OF EQUITY. Stock price (Po) = 30; earnings growth rate (g) = 4%; last dividend (D.) = 2.40 per share. Using the discounted cash flow model, calculate cost of common equity (rp)