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Calculate: Cost of Equity from Retained Earnings

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Question: Assume that Kish Inc. hired you as a consultant to help estimate its cost of capital. You have obtained the following data: D0 = $0.90; P0 = $30.00; and g = 7.00% (constant). Based on the DCF approach, what is the cost of equity from retained earnings?

- 9.60%
- 7.66%
- 11.33%
- 8.37%
- 10.21%

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