he common stock for the Hetterbrand Corporation sells for $$$$60\mathrm{.}01,$ and the last dividend paid was $$$$2\mathrm{.}25.$ Five years ago the firm paid $$$$1\mathrm{.}95$ per$$ share, and dividends are expected to grow at the same annual rate in the future as they did over the past five years.

a$.$ What is the estimated cost of common equity to the firm using the dividend growth$$ model?

b$.$ Hetterbrand's CFO has asked his financial analyst to estimate the$$ firm's cost of common equity using the CAPM as a way of validating the earlier calculations. The$$ risk$-$free rate of interest is currently $4\mathrm{.}1$percent$,$ the market risk premium is estimated to be $4\mathrm{.}8$percent$,$ and$$ Hetterbrand's beta is $0\mathrm{.}74.$ What is your estimate of the$$ firm's cost of common equity using this$$ method?