For the dividend discount model Cohen is correct that it does not represent the intrinsic cost of capital because you can see that it didn't pay dividends for the second half of 2001. The rate presented expected a constant growth of 5.5% per year which I calculated as the following D0=0.48 D1=0.48*1.055= .5064 P0=42.90 .5064/42.09+.055=6.7%