6. Problem 10,06 (Cost of Common Equity) The future earnings, dividends, and common stock price of Callahan Technologles Inc are expected to frow 5% per year. Callahan's common stock currentiy selis for $28.75 per. stare; its last dividend was $1.60; and it will pay a $1.68 dividend at the end of the current year. a. Using the DOF approach, what is its cost of common equity? Do not round intermediate calculations, Round your answer to two decimal places: b. If the firm's beta is 1.0, the risk-free rate is 5%, and the average return on the market is 12%, what will be the firm's cost of common eauty using the CAPM approsch? Round your antwer to two decimal places. \%. c. If the firm's bonds eam a retum of 117 , based on the bond-yield-plus-risk-premium approach, what will be to? Use the midpoint of the risk premium range discussed in Section 10-5 in your calculations, Pound your answer to two decimal places. d. If you have equal confidence in the inpuits used for the three opproaches, what is your estimate of CaYahan's cost of common equity? Do not round interinediate. calculations. Round your answer to two decimal places