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Keep the Highest / 4 The cost of retained earnings The cost of raising capital through retained earnings is the cost of raising capital through

Keep the Highest /4
The cost of retained earnings
The cost of raising capital through retained earnings is
the cost of raising capital through issuing new common stock.
The current risk-free rate of return is 4.60% and the current market risk premium is 6.60%. Green Caterpillar Garden Supplies Inc. has a beta of
1.56. Using the Capital Asset Pricing Model (CAPM) approach, Green Caterpillar's cost of equity is
Cute Camel Woodcraft Company is closely held and, as a result, cannot generate reliable inputs for the CAPM approach. Cute Camel's bonds yield
10.20%, and the firm's analysts estimate that the firm's risk premium on its stock relative to its bonds is 4.50%. Using the bond-yield-plus-risk-
premium approach, the firm's cost of equity is
The stock of Cold Goose Metal Works Inc. is currently selling for $32.45, and the firm expects its dividend to be $1.38 in one year. Analysts project the
firm's growth rate to be constant at 5.70%. Using the discounted cash flow (DCF) approach, Cold Goose's cost of equity is estimated to
be
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