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Quantitative Problem: Barton Industries estimates its cost of common equity by using three approaches: the CAPM, the bond-yield-plus-risk-premilum approach, and the DCF model. Barton expects

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Quantitative Problem: Barton Industries estimates its cost of common equity by using three approaches: the CAPM, the bond-yield-plus-risk-premilum approach, and the DCF model. Barton expects next year's annual dividend, D1, to be $1.70 and it expects dividends to grow at a constant rate g=3.6%. The firm's current common stock price, P0, is $25.00. The current risk-free rate, r1,=4.0%; the market risk premilum, R.PMr=5.3%, and the firm's stock has a current beta, b, = 1.25. Assume that the firm's cost of debt, rd is 7.88%. The firm uses a 2.3% risk premium when arriving at a ballpark estimate of its cost of equity using the bondyeld-plus-risk-premlum approsch. What is the firm's cost of equity using each of these three approaches? Round your answers to two decimal places. CAPM cost of equity: Bond yield plus risk premium: DCF cost of equity: What is your best estimate of the firm's cost of equity

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