ornwell Industries stock has a beta of 1.10. The company just paid a dividend of $0.90, and the dividends are expected to grow at 4%. The expected return on the market is 12%, and Treasury bills are yielding 4.2%. The most recent stock price for the company is $72.

a. Calculate the cost of equity using the dividend growth model method. (Do not round intermediate calculations. Round the final answer to 2 decimal places.)

Dividend growth model method %

b. Calculate the cost of equity using the SML method. (Do not round intermediate calculations. Round the final answer to 3 decimal places.)

SML method %