a. The cost of raising capital through retained earnings is (less than or greater than) the cost of raising capital through issuing new common stock.

b. The current risk-free rate of return (rRFrRF) is 3.86% while the market risk premium is 6.63%. The Burris Company has a beta of 1.56. Using the capital asset pricing model (CAPM) approach, Burriss cost of equity is ____

c. The Taylor Company is closely held and, therefore, cannot generate reliable inputs with which to use the CAPM method for estimating a companys cost of internal equity. Taylors bonds yield 11.52%, and the firms analysts estimate that the firms risk premium on its stock over its bonds is 5.89. Based on the bond-yield-plus-risk-premium approach, Taylors cost of internal equity is: ____

d. Tyler Enterprisess stock is currently selling for $25.67 per share, and the firm expects its per-share dividend to be $1.38 in one year. Analysts project the firms growth rate to be constant at 7.27%. Estimating the cost of equity using the discounted cash flow (or dividend growth) approach, what is Tylers cost of internal equity?

e. Suppose Tyler is currently distributing 65% of its earnings in the form of cash dividends. It has also historically generated an average return on equity (ROE) of 16%. Tylers estimated growth rate is ____