The earnings, dividends, and stock price of Shelby Inc. are expected to grow at 7% per year in the future. Shelbys common stock sells for $23 per share, its last dividend was $2.00, and the company will pay a dividend of $2.14 at the end of the current year.

c. If the firms bonds earn a return of 12%, then what would be your estimate of rs using the own-bond-yield-plus-judgmental-risk-premium approach? (Hint: Use the mid- point of the risk premium range.)

d. On the basis of the results of Parts a through c, what would be your estimate of Shelbys cost of equity?

Please answer both c and d by providing Excel syntax; no hand-written answers