First City Medical Associates is a large, for profit group practice. Its stock pays dividends

that are expected to grow at a constant rate of $7\%$ per year into the foreseeable future.

Its last dividend paid $($D$0)$ was $$2\mathrm{.}00$ per share, and its current stock price is $$23\mathrm{.}00.$ The

company's stock has a current estimated beta of $1\mathrm{.}6,$ the current market risk free rate of

return $($as estimated by a $20-$year treasury bond$)$ is $9\%,$ and the expected$/$required

market rate of return on the market is currently $13\%.$ The company's target capital

structure calls for $50\%$ long term debt, and current interest rates for long term debt in

the $20-30$ year range is $10\%.$ The company currently pays a combined federal plus state

corporate tax rate of $40\%.$

A$.$ What is First City's cost of equity estimate according to the DCF method?

B$.$ What is First City's cost of equity estimate according to the CAPM method?

C$.$ What is First City's estimated corporate cost of capital?