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Amarindo, Inc.? (AMR), is a newly public firm with 9.0 million shares outstanding. You are doing a valuation analysis of AMR. You estimate its free cash flow in the coming year to be $14.79 ?million, and you expect the? firm's free cash flows to grow by 4.2?% per year in subsequent years. Because the firm has only been listed on the stock exchange for a short? time, you do not have an accurate assessment of? AMR's equity beta.? However, you do have beta data for? UAL, another firm in the same? industry:

Equity Beta Debt Beta Debt Equity Ratio

UAL 2.10 0.42 1.4

AMR has a much lower? debt-equity ratio of 0.42?, which is expected to remain? stable, and its debt is risk free.? AMR's corporate tax rate is 35?%, the? risk-free rate is 5.1?%, and the expected return on the market portfolio is 11.3%.

a. Estimate? AMR's equity cost of capital.

b. Estimate? AMR's share price.

a. Estimate? AMR's equity cost of capital.

The equity cost of capital is _____?%. (Round to two decimal? places.)

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