Estimating the cost of common from retained earnings


Assume that you are a consultant to Broske Inc., and you have been provided with the following data: D1 = $0.67; P0 = $27.50; and g = 8.00% (constant). What is the cost of common from retained earnings based on the DCF approach?

a- 9.42%

b- 9.91%

c- 10.44%

d- 10.96%

e- 11.51%

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Finance Basics: Estimating the cost of common from retained earnings
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