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Retained Earnings: Mary Brown Inc.

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Assume that Mary Brown Inc. hired you as a consultant to help it estimate the cost of capital. You have been provided with the following data: Do = $1.20 Po = $40.00 and g = 7%(constant) Based on the DCF approach, what is Brown's cost of equity from retained earnings.

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The cost of equity from retained earnings for Mary Brown Inc. is discussed in this solution.

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