Lahore School of Economics Financial Management I Assignment 20 The Cost of Capital - 2 50 1. Suppose you are an analyst with the following data: Risk-free rate=5.5%, Market risk premium = 6%, beta = 0.8, D1 = $1.00, PO =$25.00, g = 6%, and rd = firm's bond yield = 6.5%. What is this firm's cost of equity using the CAPM, DCF, and bond-yield plus-risk-premium approaches? Use 4% as the midrange of the judgmental risk premium for the bond- 11 lurrisk-premium approach. no preferred stock. The yield to ny's