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Malko Inc. hired you as a consultant to help them estimate their cost of capital. You have been provided with the following data. ( 1

Malko Inc. hired you as a consultant to help them estimate their cost of capital. You have been provided with the following data. (1): rd = yield on the firms bonds =6.5% and risk premium over own debt cost =4%.(2) yield on a 10 year US treasury =5.5%, market risk premium =6.5%, and b =1.2.(3) D1= $1.20; P0= $40.00 and g =7%(constant). You were asked to estimate the cost of equity based on the three most commonly used methods. What is the cost of equity using 1) bond-yield-plus-risk-premium approach, 2) CAPM, 3) discounted cash flow approaches.
A)11.5%,12.5%,11%
B)12.3%,14.5%,12%
C)10.50%,13.3%,10%
D)10.50%,10%,13.3%

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