Use the dividend valuation model to determine the cost of common and preferred equity. Use the CAPM approach to calculate the required rate of return for the common stock. Why do the common stock estimates differ between the dividend model and the CAPM? Beta for common stock is around 0.7. A share of common stock was selling for €9.10, and a share of preferred stock was selling for €15.25. The preferred stock also paid a constant dividend of 1.07. Wulfurt has 30 million common shares outstanding. Wulfurt has 2 million preferred shares outstanding. Average annual return on common stock is10.5% and for the preferred it is 8.34%. Please let me know if you need more info. Risk free return is 4.89