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As the assistant to the CFO of Johnstone Inc., you must estimate its cost of common equity. You have been provided with the following data:

As the assistant to the CFO of Johnstone Inc., you must estimate its cost of common equity. You have been provided with the following data: D0 = $0.70; P0 = $26.30; and g = 7.00% (constant). Based on the DCF approach, what is the cost of common from reinvested earnings?

9.16%

9.85%

11.14%

13.04%

14.59%

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