Use the following information for the next two questions. A risk analyst gives HP Company a CAPM equity beta of 2.5. The risk-free rate is 2%. The market risk premium is 10%. Question 1 (5.55 points) Using CAPM, what is HP's cost of capital? o 22% 27% 25% 20% Question 2 (5.55 points) At the end of August 2018, analysts were forecasting earnings of $3.50 per share for the fiscal year ending August 31, 2019. They were also forecasting that the P/E ratio would be 13 on August 31, 2019. HP is expected to pay $2 in dividends per share for the fiscal year. Calculate the current value of the stock in August 2018 for this P/E forecasting $37.30 O $38.93 0 $37.40 $35.83