The cost of equity using the CAPM approach

The current risk$-$free rate of return $(r_{RF})$ is $4\mathrm{.}23\%$ while the market risk premium is $5\mathrm{.}75\%.$ The Jefferson Company has a beta of $0\mathrm{.}78.$ Using the

capital asset pricing model $($CAPM$)$ approach, Jefferson's cost of equity is

The cost of equity using the bond yield plus risk premium approacl

$9\mathrm{.}156\%$

The Taylor Company is closely held and, therefore, cannot generate reliab

of internal equity. Taylor's bonds yield $10\mathrm{.}28\%,$ and the firm's analysts est

$9\mathrm{.}592\%$

Based on the bond$-$yield$-$plus$-$risk$-$premium approach, Taylor's cost of inte

th which to use the CAPM method for estimating a company's cost

the firm's risk premium on its stock over its bonds is $3\mathrm{.}55\%.$

is:

$13\mathrm{.}14\%$

$16\mathrm{.}60\%$

$13\mathrm{.}83\%$

$15\mathrm{.}21\%$

The cost of equity using the discounted cash flow $($or dividend growth$)$ approach

Tyler Enterprises's stock is currently selling for $$25\mathrm{.}67$ per share, and the firm expects its per$-$share dividend to be $$2\mathrm{.}35$ in one year. Analysts project

the firm's growth rate to be constant at $5\mathrm{.}72\%.$ Estimating the cost of equity using the discounted cash flow $($or dividend growth$)$ approach, what is

Tyler's cost of internal equity?

$14\mathrm{.}87\%$

$18\mathrm{.}59\%$

$14\mathrm{.}13\%$

$15\mathrm{.}61\%$