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Ringheiser Inc. hired you as a consultant to help estimate its cost of capital. You have been provided with the following data: D 0 =

Ringheiser Inc. hired you as a consultant to help estimate its cost of capital. You have been provided with the following data: D0 = $0.75; P0 = 55; and g = 7.00% (constant). The tax rate is 40% and the yield to maturity on the firm's bonds is 7%. What is the cost of equity from retained earnings? Do not round your intermediate calculations.

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