The cost of equity using the discounted cash flow (or dividend-yield-plus-growth-rate) approach Pierce Enterprises's stock is currently selling for $23.00 per share, and the firm expects its per-share dividend to be $2.25 in one year. Analysts project the firm's growth rate to be constant at 4.00%. Using the discounted cash flow (or dividend-yield-plus-growth-rate) approach, what is Pierce's cost of internal equity? O 14.47% 11.71% 13.78% 13.09% Estimating growth rates It is often difficult to estimate the expected future dividend growth rate for use in estimating the cost of existing equity using the DCF (or dividend-yield-plus-growth-rate) approach. In general, there are three available methods to generate such an estimate: Carry forward a historical realized growth rate, and apply it to the future Locate and apply an expected future growth rate prepared and published by security analysts. Use the retention growth model. Suppose Pierce Enterprises's is currently distributing 45% of its earnings as cash dividends. It has also historically generated an average return on equity (ROE) of 13.00%. It is reasonable to estimate Pierce's growth rate is