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Assume that you are a consultant to Morton Inc., and you have been provided with the following data: dividend expected to be paid, D 1

Assume that you are a consultant to Morton Inc., and you have been provided with the following data: dividend expected to be paid, D1 = $1.00; current stock price, P0 = $25.00; and expected dividend growth rate, g = 6% (constant). What is the cost of equity from retained earnings based on the DCF approach?

A. 10.00%

B. 10.20%

C. 9.79%

D. 9.86%

E. 10.33%

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