Robert Enterprises stock has a beta of 1.15. The company just paid a dividend of $.45, and the

dividends are expected to grow at 4 percent. The expected return on the market is 11 percent, and

Treasury bills are yielding 3.7 percent. The most recent stock price for the company is $72.

a) Calculate the cost of equity using the dividend growth model method.

b) Calculate the cost of equity using the SML method.