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Bunkhouse Electronics is a recently incorporated firm that makes electronic entertainment systems. Its earnings and...

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Accounting

Bunkhouse Electronics is a recently incorporated firm that makes electronic entertainment systems. Its earnings and dividends have been growing at a rate of 32.0%, and the current dividend yield is 4.00%. Its beta is 1.24, the market risk premium is 10.00%, and the risk-free rate is 3.60%.
a. Use the CAPM to estimate the firm's cost of equity.
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
b. Now use the constant growth model to estimate the cost of equity.
Note: Do not round intermediate calculations. Enter your answer as a whole percent.
c. Which of the two estimates is more reasonable?
\table[[a. Cost of equity,,%
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