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Assume that you are a consultant to ABC Inc., and you have been provided with the following data: D 1 = $0.67; P 0 =

Assume that you are a consultant to ABC Inc., and you have been provided with the following data: D1 = $0.67; P0 = $42.50; and g = 7.00% (constant). What is the cost of equity based on the DCF approach?

1.

9.96%
2.

7.95%
3.

11.68%
4.

8.58%
5.

11.30%

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