7. High Growth Company has a stock price of $18. The firm will pay a dividend next year of $0.89, and its dividend is expected to grow at a rate of 3.9% per year thereafter. What is your estimate of High Growth's cost of equity capital? The required return (cost of capital) of levered equity is %. (Round to one decimal place.) 8. Mackenzie Company has a price of $30 and will issue a dividend of $2.00 next year. It has a beta of 1.5, the risk-free rate is 5.4%, and the market risk premium is estimated to be 4.8%. a. Estimate the equity cost of capital for Mackenzie. b. Under the CDGM, at what rate do you need to expect Mackenzie's dividends to grow to get the same equity cost of capital as in part (a)? a. Estimate the equity cost of capital for Mackenzie. The equity cost of capital for Mackenzie is %. (Round to two decimal places.) b. Under the CGDM, at what rate do you need to expect Mackenzie's dividends to grow to get the same equity cost of capital as in part (a)? The expected growth rate for dividends is %. (Round to two decimal places.)