Stock in Parrothead Industries has a beta of 1.10. The market risk premium is 8 percent, and T-bills are currently yielding 5.5 percent. Parrotheads most recent dividend was $2.20 per share, and dividends are expected to grow at a 5 percent annual rate indefinitely. If the stock sells for $32 per share, what is your best estimate of Parrotheads cost of equity? Use the dividend growth model and SML or CAPM method.