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%