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Question 2 The SAC stock has a beta of 1.2. The company just paid a dividend of $2.0, and the dividend is expected to grow at 6% per year, indefinitely. The expected market return is 12%, and the risk-free is 4%. The most recent stock price for SAC is $60. a. Calculate the cost of equity using the DDM method. b. Calculate the cost of equity using the SML method. Why are your estimates (in [a] and [b]) are so different? c