To help estimate its cost of common equity, Maxwell and Associates recently hired you. You have obtained the following data: Do=$.90, Po=$27.50, and g=7% (constant). Base don the DCF approach what is the cost of common from reinvested earnings?

D1= $.063

Po= $27.50

g= 7.00%

rs= D1/Po+g

My answer: 3.5% but the correct answer is $10.50%. I know I am doing something wrong with my math, can you please provide the break down for the math on this exercise? Thank you.