use some weighted average of the three methods. Judgment is important and comes into play here, as is true for most decisions in finance. Quantitative Problem: Barton Industries estimates its cost of common equity by using three approaches: the CAPM, the bond-yield-plus-risk-premium approach, and the DCF model. Barton expects next year's annual dividend, Di, to be $2.30 and it expects dividends to grow at a constant rate g = 3.0%. The firm's current common stock price, Po, is $20.00. The current risk-free rate, rRF, = 4,3%; the market risk premium, RPM, = 5.6%, and the firm's stock has a current beta, b, = 1.20. Assume that the firm's cost of debt, rd, is 15.38%. The firm uses a 2.6% risk premium when arriving at a ballpark estimate of its cost of equity using the bond-yield-plus-risk-premium approach. What is the firm's cost of equity using each of these three approaches? Round your answers to two decimal places. CAPM cost of equity: Bond yield plus risk premium: 96 DCF cost of equity 9 %