The current risk-free rate of return ( rRF ) is 4.67% while the market risk premium is 6.63%. The Wilson Company has a beta of 1.56 . Using the capital asset pricing model (CAPM) approach, Wilson's cost of equity is The Kennedy Company is closely held and, therefore, cannot generate reliable inputs with which to use the CAPM method for estimating a company's cost of internal equity. Kennedy's bonds yleid 10.28%, and the firm's analysts estimate that the firm's risk premium on its stock over its bonds is 5.89 Based on the bond-yield-plus-risk-premlum approach, Kennedy's cost of internal equity i: 16.17% 15.36% 19.40% 20.21% The cost of equity using the discounted cash flow (or dividend growth) approach Pierce Enterprises's stock is currently seling for $25.67 per share, and the firm expects its per-share dividend to be $2.35 in one year. Analysts project the firm's growth rate to be constant at 5.72%. Estimating the cost of equity using the discounted cash flow (or dividend growth) approach, what is plerce's cost of internal equity? 18.59% 14.87% 14.13% 20.07% 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 DG approach. In general, there are three avallable methods to generate such an estimate: - Carry forward a historical realized growth rate, and apply it to the future