Bunkhouse Electronics is a recently incorporated firm that makes electronic entertainment systems. Its earnings and dividends have been growing at a rate of 40.0%, and the current dividend yield is 12.00%. Its beta is 1.40, the market risk premium is 18.00%, and the risk-free rate is 2.00%.

a. Use the CAPM to estimate the firms cost of equity. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

b. Now use the constant growth model to estimate the cost of equity. (Do not round intermediate calculations. Enter your answer as a whole percent.)