Restless. corn has an 8% rate of interest on newly issued bonds. The firm has a return on equity of 13.33% and a dividend payout ratio of 40% ; the last dividend paid was $ 1.50, and the firm’s shares sell for $ 26. The stock’s beta is 1.7, the expected return on the market portfolio is 11%, and the risk-free rate of interest is 6%. If the appropriate risk premium relative to the bond yield is 5% for a dot-corn, estimate Restless. corn’s cost of equity capital using the bond yield plus risk premium (BY+RP), the dividend discount model (DDM) and the capital asset pricing model (CAPM), respectively. The firm is in a 35% marginal tax bracket. BY+RP DDM CAPM （）①A. 10.2% 14.2% 24.7%②B. 10.2% 11.4% 13.5%③C. 13.0% 14.2% 14.5%
A. ①
B. ②
C. ③