Market price of RetCar Company is $40 per share. The last dividend paid by RetCar was $3.77 per share and the dividend is expected to grow at a constant rate of 6 percent per year. What is the firms cost of equity?

		A. 16.5%
B.		16.75%
C	.	16.00%
D.		17.05%
E.		17.30%

Zolla Company hired your consulting firm to help them estimate the cost of equity. The yield on the firm's bonds is 10.50%, and your firm's economists believe that the cost of equity can be estimated using a risk premium of 4.85% over a firm's own cost of debt. What is an estimate of the firm's cost of equity from retained earnings?

		A. 14.35%
B.		12.62%
C.		15.35%
D.		16.92%
E.		17.50%

Assume that Piola Company hired you as a consultant to help estimate its cost of capital. You have obtained the following data: D₀ = $0.90; P₀ = $40.00; and g = 7.00% (constant). Based on the DCF approach, what is the cost of equity from retained earnings?

		A. 9.41%
B		8.66%
C.		10.33%
D.		8.37%
E.		9.21%