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Lanser Inc.: Based on the DCF approach, what is the cost of equity from retained earnings?

Lanser Inc. hired you as a consultant to help them estimate its cost of capital. You have been provided with the following data: D1 = $0.80; P0 = $22.50; and g = 5.00% (constant). Based on the DCF approach, what is the cost of equity from retained earnings?

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Lanser Inc. hired you as a consultant to help them estimate its cost of capital. You have been provided with the ...

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This solution consists of a brief, concise calculation of price of stock and cost of equity to solve the problem being asked.

$2.19