Teall Development Company Hired You as a Consultant to Help

question 54

Multiple Choice

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 = $1.45; P0 = $22.50; and g = 6.50% (constant) . Based on the DCF approach, what is the cost of equity from retained earnings?

• A) 11.10%
• B) 11.68%
• C) 12.30%
• D) 12.94%
• E) 13.59%

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