Berta Industries stock has a beta of 1.20. The company just paid a dividend of $0.50, and the dividends are expected to grow at 6 percent. The expected return on the market is 11 percent, and Treasury bills are yielding 5.6 percent. The most recent stock price for Berta is $73.
a. Calculate the cost of equity using the DCF method.
b. Calculate the cost of equity using the SML method