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Assume that you are a consultant to XYZ Inc. and you have been provided with the following data: D1 = $0.67; P0 = $27.50; and

Assume that you are a consultant to XYZ Inc. and you have been provided with the following data: D1 = $0.67; P0 = $27.50; and g = 8.00% (constant) . What is the cost of equity from retained earnings based on the DCF approach?

a. 9.42%

b. 9.91%

c. 10.44%

d. 10.96%

e. 11.51%

Please provide a worked out solution including the formula.

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