Cost of Equity Capital A firm is raising capital for a new project. Their Oustanding bonds pay 14% interest annually. Investors currently pay $1124 for the 10-year bond. This firm plans to issue common stock. The additional risk permium on the firm's stock is 2.3%. Estimate the cost of equity capital? Take a minute and rewrite this information in your own words? What information is provided and what are you trying to find? Which intermediate steps are needed (do you need the yield to maturity on the bonds?) Which of the three cost of equity methods should be used based on the information provided Solve for the cost of equity 6.51% 2.69% None of the other choices 4.99% 4.21%