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Assume that ABC Inc. hired you as a consultant to help estimate its cost of capital. You have obtained the following data: D 0 =

Assume that ABC 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 = 6.00% (constant). Based on the DCF approach, what is its cost of equity?

1.

8.37%
2.

9.18%
3.

9.60%
4.

11.33%
5.

7.66%

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