Preheat oven to 350°F and grease and flour three 8-inch round cake pans.
In a large bowl, whisk together flour, baking powder, salt, and sugar. Add eggs, oil, coconut extract, and milk. Mix on medium speed with an electric mixer until all ingredients are incorporated, about 1 to 2 minutes. Stir in shredded coconut.
Divide batter equally among the prepared cake pans and bake for 23 to 25 minutes, or until cakes are golden brown and set in the center. Insert a wooden pick into the center of each layer to check for doneness. If it comes out clean or with only a few crumbs, the cakes are done. Let cakes cool in pans for 10 minutes, then transfer to a wire rack to cool completely.
While the cake layers are cooling, make the filling. In a medium-sized bowl, combine all filling ingredients and stir until combined and shredded coconut is distributed evenly throughout. Cover and store in the refrigerator until ready to use. (Filling can be made a day in advance.)
To make the frosting, cream butter and shortening on medium speed in the bowl of a stand mixer. Add coconut extract and half of powdered sugar and 2 tablespoons of heavy cream. Mix on low speed until ingredients are mostly combined, and then medium-high speed until completely combined. Repeat with second half of powdered sugar. (If frosting is too thick, add another tablespoon of cream or milk.)
Recipe and photography provided by Bethcakes
To assemble the cake, place one cake layer on a cake plate or stand. Pipe a border of frosting around the top of the cake. Spoon half of filling into the border and spread with a spoon. Top with second cake layer. Repeat the process of piping a border and adding filling. Top with the third cake layer. Spread frosting evenly around the outside and over the top of the cake. Use your hands to press shredded coconut into the frosting all over the outside of the cake.
Store cake in the refrigerator for at least a few hours before serving so the flavors can meld together and the filling can firm up. (Or three days if you want the full Coconut Dream Cake experience!) If you don’t have a dome to cover the cake with or if a dome won’t fit over the cake in your fridge, loosely cover with plastic wrap.