Ch 10-End-of Chapter Problems - The Cost of Capital Back to Assignment Attempts Keep the Highest/4 4. Problem 10.06 (Cost of Common Equity) ebook Problem Walk-Through The future earnings, dividends, and common stock price of Callahan Technologies Inc. are expected to grow 6% per year. Callahan's common stock currently sells for $21.50 per share its last dividend was $1.50; and it will pay a 51.59 dividend at the end of the current year. 3. Using the DCF approach what is its cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places b. If the firm's betai 0.7, the nisk-free rates 7%, and the average return on the market is 13%, what will be the firm cost of common equity using the CAPM approach Round your answer to two decimal places c. If the firm's bonds earn a return of 12%, based on the bond-yield-plus-riskpremium approach, what will be re? Use the judgmental risk premum of 4% in your calculations, Round your answer to two decimal places 16 d. If you have equal confidence in the inputs used for the three approaches, what your estimate of Callahan's cost of common equity Do not round intermediate calculations. Round your answer to two decal places