Problem #1 (6 Marks) The market is expected to return 12%, and T-bills are currently yielding 2%. Edis Engineering has a beta of 0.95 and just paid a dividend of $2 per share. Dividends have been growing at an annual rate of 2% and are expected to continue at this rate forever. If the stock sells for $24.25 per share, what is the average of the company's cost of equity (use the two methods taught)