Assume that ABC Inc. hired you as a consultant to help estimate its cost of capital. You have obtained the following data: D0 = $0.90; P0 = $30.00; and g = 6.00% (constant). Based on the DCF approach, what is its cost of equity?
1. 8.37%
2. 9.18%
3. 9.60%
4. 11.33%
5. 7.66%