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problem: Suppose that Mary Brown Inc. hired you as a consultant to help it determine the cost of capital. You have been provided with the following data: 

D0 = $1.20; 

P0 = $40.00; and g = 7% [constant]. 

Based on the DCF approach, find out the Brown's cost of equity from retained earnings? 

[A] 10.06%

[B] 10.21%

[C] 10.37%

[D] 10.54%

[E] 10.68%

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M917994

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