Assume That You Are a Consultant to Broske Inc

question 13

Multiple Choice

Assume that you are a consultant to Broske Inc., and you have been provided with the following data: D1 = $0.67; P0 = $27.50; and g = 8.00% (constant) . What is the cost of equity from retained earnings based on the DCF approach?

• A) 9.42%
• B) 9.91%
• C) 10.44%
• D) 10.96%
• E) 11.51%

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Definitions:

Employer

An individual or organization that hires and pays for the services of workers.

Life Insurance

A contract between an insurer and an insured that guarantees payment to named beneficiaries upon the death of the insured.

Pay-outs

Pay-outs refer to amounts of money paid to someone, often as part of a settlement, as earnings or as a distribution from investments.

Limitation Clause

A provision in a contract that limits the amount of time within which a party can sue for breaches of the contract’s terms.