Suppose Hornsby Ltd. just issued a dividend of $2.50 per share on its common stock. The company paid dividends of $2.00, $2.07, $2.24, and $2.34 per share in the last four years.

If the stock currently sells for $69, what is your best estimate of the company's cost of equity capital using arithmetic and geometric growth rates?

Cost of equity

Arithmetic dividend growth rate%

Geometric dividend growth rate%