Sherwin-Williams considers raising capital by issuing new equity. What is the firm's cost of common equity if the stock beta is 3? The T-Bond rate is 3% and the S&P 500 return is 15%.

Sherwin-Williams has been paying dividends for a long time. The firm paid $5.7 last year (D₀ = $5.7). It is expected that the firm will increase dividends at a constant growth rate of 4%. The stock is currently selling for $128. What is the cost of common equity?