Dcf approach and retained earnings


Assume that Kish Inc. hired you as a consultant to help estimate its cost of common equity. You have obtained the following data: D0 = $0.90; P0 = $27.50; and g = 7.00% (constant). Based on the DCF approach, what is the cost of common from retained earnings?

a. 9.29%

b. 9.68%

c. 10.08%

d. 10.50%

e. 10.92%

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Finance Basics: Dcf approach and retained earnings
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