Intro

Runtan Inc. has just paid an annual dividend of $$0\mathrm{.}45$ per share. Analysts expect the firm's dividends to grow by $3\%$ forever. Its stock price is $$35$ and its beta is $1\mathrm{.}3.$ The risk$-$free rate is $2\%$ and the expected return on the market portfolio is $8\%.$

Part $1$

Attempt $\frac{4}{5}$ for $7$ pts$.$

What is the best guess for the cost of equity?