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Cost of Equity

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Assume that you are a consultant to Broske Inc., and you have been provided with the following data: D1 = $1.30; P0 = $42.50; and g = 7.00% (constant). What is the cost of equity from retained earnings based on the DCF approach?

A. 9.08%
B. 9.56%
C. 10.06%
D. 10.56%
E. 11.09%

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The solution explains how to calculate the cost of equity

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