Homework 7 (Chapter 12 - Estimating the Cost of Capital) due before 3/13/202311:59pm Please show all your work to receive full credit. Problem 1: A company has a beta of 1.3. The market risk premium is expected to be 8%, and the current risk-free rate is 4%. What is the cost of equity using CAPM? (2 Points) Problem 2: 3M (MMM) just paid a dividend of \$2.75 per share and the dividend is expected to grow at a rate of 5% in perpetuity. The current stock price is $110. What is the cost of equity using the dividend discount model? (2 Points) Problem 3: Calculate the annual cost of debt for the following AAA-rated bond which pays semi-annual coupons. The years left to maturity is 9 years, the coupon rate is 8% and the coupons are paid semi-annually. The face (par) value is $1,000 and the bond currently sells for $964. (3 Points)