The Tayior 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. Faylor's bonds yleld 11.52%, and the firm's analysts estimate that the firm's risk premium on its stock over its bonds is 3.55%. Based on the bond-yield-plus-risk-premium approach, Daylor's cost of internal equity is: 15.07% 18.039 18.84 i. 16.58% The cost of equity using the discounted cash flow (or dividend growth) approach Ford Enterprises's stock is currently seling for 545,56 per share, snd the firm expects its per-share dividend to be 51.38 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 Ford's cost of internal equity? 10.944 8.75% 9.19% 11.81% 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 Ford is currently distributing 55% of its earnings in the form of cash dividends. It has aiso historically generated an average retum on equity (ROE) of 20\%. Ford's estimated growth rate is \%