True or false: tt is free for a company to raise money through retained earnings, because retained earnings represent money that is left over after dividends are paid out to shareholders. False True The cost of equity using the CAPM approach The yield on a three-month T-bill is 3.12%, and the yield on a 10 -year T-bond is 4.23%, the market risk premium is 6.17%. The Monroe Cocnpany has. a beta of 0.78: Using the Capital Asset Prong Model (CAPM) approach, Monroe's cost of equity is The cost of equity using the bond yield plus risk premium approach The Adams Company is dosely held and, therefore, cannot generate reliable inputs with which to use the capM method for estimating a company's cost of internal equity. Adams's bonds yield 11.52%, and the firm's analysts estimate that the firm's nsk premium on its stock aver its bonds is 3.55%. Based on the bond-yeld-plus-risk-premium approach, Adams's cost of internal equity is: 15.07% 16.59% 16.09% 14.32% The cost of equity using the discounted cash flow (or fividend growth) approach a beta of 0.78 . Using the Capatal Asset Pricing Model (CAPN) approach, Monroe's cost of equity is The cost of equity using the bond yield plus risk premium approach The Adams Company is closely held and, therefore, cannot generate reliable inputs with which to use the CAPN method for estimating a compams cost of internal equity. Adams's bonds yield 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, Adams's cost of internal equity is: 15.07% 16.58% 18.08% 14.32% The cost of equity using the discounted cash flow (or dividend growth) approach Derce Enterprisess atock is currenty seiling for $45.56 per share, and the firm expects its per-thaee dividend to be 52.35 in oae year. Analysts project the firm's growth rate to be constant at 5,72%. Using the cost of equity using the discounted cosh flow (or dividend growth) spptoach, what is Pierce's cost of internal equity? 13.60% 10.8045 10.34% 11.42%