9.10 The earnings, dividends, and stock price of Motortech Inc. are expected to grow at 4% per year in the future. Motortech's common stock sells for $38 per share, its last dividend was $2.80, and the company will pay a dividend of $2.91 at the end of the current year. a. Using the discounted cash flow approach, what is its cost of equity? b. If the firm's beta is 1.3, the risk-free rate is 5.0%, and the expected return on the market is 9.0%, what will be the firm's cost of equity using the CAPM approach? c. If the firm's bonds earn a return of 8%, what will be using the bond-yield-plus-risk-premium approach? (Hint: Use the midpoint of the risk premium range.) d. On the basis of the results of parts a through c, what would you estimate Motortech's cost of equity to be