Question $2(1$pt$)$

Which of the following formulas correctly describes the cost of equity?

A$.$ RE $=$ Do$/$Po $+$ g

B$.$ RE $=$ D$1+$ g$/$Po

C$.$ RE $=$ D$1/$Po $+$ g

D$.$ RE $=$ Rf$-$ BETA x $($Rf $-$ Rm$)$

E$.$ RE $=$ Rf $+$ BETA x $($Rm $-$ Rf$)$

Where:

Rf$=$risk$-$free rate

E$($Rm$)-$Rf$=$ market risk premium

BETA $=$ systematic risk of assets