The earnings, dividends, and stock price of Tenew Technologies, Inc. are expected to grow at 5 percent per year in the future. Tenews common stock sells for $75 per share, its last dividend was $10.00.

a. Using the discounted cash flow approach, what is its cost of common equity?

b. If the firms beta is 2, the risk-free rate of return is 3 percent, and the average return on the market is 11 percent, what will be the firms cost of equity using the SML equation (CAPM approach)?