The cost of retained earnings The cost of raising capital through retained earnings is__________the cost of raising capital through issuing new common stock. The yield on a three-month T-bill is 2.7%, and the yield on a 10-year T-bond is 3.8%. The market risk premium is 6.1%. Allen Co. has a beta of 1.56. Using the Capital Asset Pricing Model (CAPM) approach, Allen's cost of equity is_________. The cost of equity using the CAPM approach Cano Co. is closely held and, consequently, cannot generate reliable inputs for the CAPM approach. Cano's bonds yield 10.2%, and the firm's analysts estimate that the firm's risk premium on its stock over its bonds is 4.5%. Using the over-own-bond-yield judgmental risk premium approach, find the firm's cost of equity: 17.6% 14.0% 16.2% 14.7% The cost of equity using the Discounted Cashflow (or Dividend Growth) Approach Kirby Co.'s stock is currently selling for $45.56, and the firm expects its dividend to be $2.35 in one year. Analysts project the firm's growth rate to be constant at 7.2%. Using the discounted cash flow (DCF) approach, what is Kirby's cost of equity? 11.8% 13.0% 12.4% 15.5%