eBook Problem Walk-Through Cost of Equity The earnings, dividends, and stock price of Shelby Inc. are expected to grow at 7% per year in the future. Shelby's common stock sells for $27.50 per share, its last dividend was $2.00, and the company will pay a dividend of $2.14 at the end of the current year. a. Using the discounted cash flow approach, what is its cost of equity? Round your answer to two decimal places b. If the firm's beta is 07, the risk-free rate is 9%, and the expected return on the market is 129 then what ould be the firms cost of equity based on the CAPM approach Round your answer to two decimal places. c. If the firm's bonds earn a return of 10% then what would be your estimate of rs using the own bond yield plus udgmental risk premium approach? Hint: Use the mid-point of the risk premium range.) Round your answer to two decimal places. d. On the basis of the results of parts a-c, what would be your estimate of Shelby's cost of equity? Assume Shelby values each approach equally. Round your answer to two decimal places