Problem:
Assume that you are a consultant to Broske Inc., and you have been provided with the following data: D1 = $0.67; P0 = $42.50; and g = 8.00% (constant).
Required:
Question: What is the cost of equity from retained earnings based on the DCF approach?
A) 11.30%
B) 9.58%
C) 9.96%
D) 11.68%
E) 7.95%
Note: Please answer in proper manner and show all computations