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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-premium 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-premium approach, and the DCF model. Barton expects next year's annual dividend, D1, to be $1.90 and it expects dividends to grow at a constant rate 9 = 5.2%. The firm's current common stock price, Po, is $25.00. The current risk-free rate, PE, -4,5%the market risk premium, RPM. = 6.2%, and the firm's stock has a current beta, b, - 1.35. Assume that the firm's cost of debt, rd, is 9.53%. The firm uses : 3.2% Tisk premium when arriving at a ballpark estimate of its cost of equity using the bond-yield-plus-rifk-premium approach. 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 M What is your best estimate of the few's cost of equity The best estimate in the highest percentage of the three approaches Check My Work is remaining One

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