Assume that Considine Inc. hired you as a consultant to help estimate its cost of capital. You have been provided with the following data: D0 = $0.90; P0 = $22.50; and g = 7.00% (constant) . Based on the DCF approach, what is Considine's cost of equity from retained earnings?
A) 9.98%
B) 10.40%
C) 10.83%
D) 11.28%
Correct Answer:
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