The cost of equity using the discounted cash flow (or dividend growth) approach: whak is Johtson's eost of MRernat thepity? 15.5506 11.525s 12.10% 14.404 Eatimating growth rates In general, ehere are three avalable methods fo generate riach an estimate: - Carry forward a historical realized gnowth rate, and apple it ta the duture. Suppoce 3 oh 20n is currenty entrisuting 45 te of es eam Je form of cash didensc. If kat a so hataricaly generated an ave wge returd dan equity (rcey of 12\%. Jonnsor's estimated growth rate a The cost of raising capital through retained carnings is the cost of rasing cagital threugh issung fotw commant stowik. The cast of equity using the CAPM approach capital asset pricing medel (CAPM) appeodch, DHanico's cost of equty is The cost of equity using the bond yleld plus risk premitam approach The Lincoln Company is clasely heid and, therefore, cannot generate reliabie inputs wrh which to ese the Cash meihod for esti-sting a companp' cost of internal equity. Lintoln's bonds yield 10.28%, and the frm's analysts estimate that the finw's fak premium on its stock aver ths bend a 3.554k. Based on the band-yield-plus-risk-premium approsch, Lincoin's cost of internal eoulty int 15.21 13.83% 17.2946 16.60% My Home 4. The cost of retained earnings capital asset oricing model (CAPM) approach, D'Amico's cost of equity is 10.42848= The cast of equity using the CAPM approach College Success Tips Career Success Tips