Please help me study. Teall Development Company hired you as a consultant to help them estimate its cost of capital. You have been provided with the following data: D₁= $1.60; P₀= $20.50; and g = 9.50% (constant). Based on the DCF approach, what is the cost of equity?

The DCF formula needed but not given is

Question 2 options:

a)P₀= D₀(1 + g) / (r_s- g)

b)P₀= D₀(1 + g) / (r_s+ g)

c)D₀= P₀(1 + g) / (r_s+ g)

d)P₀= D₁(1 + g) / (r_s- g)