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Assume that you are a consultant to a company, and you have been provided with the following data: D0 = $1.0; P0 = $50; and

Assume that you are a consultant to a company, and you have been provided with the following data: D0 = $1.0; P0 = $50; and g = 8.0% (constant). What is the cost of equity from retained earnings based on the DCF approach?

a. 9.38%

b. 10.00%

c. 10.16%

d. 11.28%

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