$7$ Estimating the DCF Growth Rate $[$ LO$1]$ Suppose Wacken, Ltd$.,$ just issued a dividend of $$2\mathrm{.}73$ per share on its common stock.

The company paid dividends of $$2\mathrm{.}31,$$$2\mathrm{.}39,$$$2\mathrm{.}48,$ and $$2\mathrm{.}58$ per share in the last four years. If the stock currently sells for $$43,$ what is

your best estimate of the company's cost of equity capital using the arithmetic average growth rate in dividends? What if you use the

geometric average growth rate?