Question 2 10 Points In estimating a firm's cost of equity, you decide to use the 3 methods discussed in the text and then to take a simple average of the three separate estimates as you feel that in this instance all 3 methods seem equally justified. The before. tax cost of debt is 8%, risk premium above debt is assumed to be 6%, the risk-free rate is 5%, the beta is.90, and the expected market return is 16%. In addition, the firm is expected to grow dividends at a constant 8.1% rate indefinitely and will pay a $2.00 dividend next year. The firm's common equity is currently selling at $25 per share. The average figure that you come up with should be closest to I 18.0% 19.9% 17.0% D 15.0% 16.0% Question 3 10 Points The key sources of value (earning an excess return) for a company can be attributed primarily to A access to capital and quality management competitive advantage and access to capital industry attractiveness and competitive advantage O quality management and industry attractiveness Question 4 10 Points