the resuired rate of return on retained earninps.it If a firm cannot invest retained earings to eam a rate of return should return those funds to its stockholders The cost of equity using the CAPM approach The current risk-free rate of return (rup) is 4.67% while the market nisk premium is 6.17%. The Monroe Company has a beta of 0.78. Using the capital asset pricing model (CAPM) approach, Monroe's cost of equity is The cost of equity using the bond yield plus risk premium approach The Lincoln Company is closely held and therefore, cannot generate reliable inguts with which to use the CAPM method for estimating a company's cost of internal equity. Lincoln's bonds vield 10.28%, and the firm's analysts estimate that the firm's risk premium on its stock over its bonds is 3.554. Based on the bond-velo-plus-risk-premium approach, Lincoln's cost of internal equity is O 15.219 16,60% 17.29% 13.839 The cost of equity using the discounted cash flow (or dividend growth) approach Tucker Enterprises's stock is currently selling for $32.45 per share, and the firm expects its per-share dividend to be $1.38 in one year. Analysts project the firm's growth rate to be constant at 5.72%. Using the cost of equity using the discounted cash flow or dividend growth) approach, what is Tucker's cost of internal equity? O 13.46% 12.46% 10.47% 0.97% 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 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 Tucker is currently distributing 75% of its earnings in the form of cash dividends. It has also historically generated an average return on equity (ROE) of 8%. Tucker's estimated growth rate is