Steves specialties inc paid its dividend yesterday, which was $3.50. The dividend has been growing at a rate of 0.010 and is excpected to keep growing indefinatly at that rat. Steves common stock is currently trading at $22.00 per share. The firms beta is 1.09.
T bills currently yield 0.025
Average market return is 0.09
Using the DCF approach what is Steves cost of retained earnings?