Assume That Kish Inc

question 31

Multiple Choice

Assume that Kish Inc.hired you as a consultant to help estimate its cost of capital.You have obtained the following data: D₀ = $0.90;P₀ = $47.50;and g = 7.00% (constant) .Based on the DCF approach,what is the cost of equity from retained earnings? Do not round your intermediate calculations.

• A) 8.85%
• B) 10.38%
• C) 10.02%
• D) 8.03%
• E) 9.03%

---

Definitions:

Income Linkage

The connection or relationship between different sources of income or its impact on economic status.

Double-entry Bookkeeping

An accounting system that records each transaction in two accounts, debits in one and credits in another, to maintain the balance of the accounting equation.

Assets and Liabilities

A financial accounting term referring to a company's resources (assets) and obligations (liabilities).

Bookkeeping Accounts

The records of the financial transactions and positions of a business, systematically organized for reporting and analysis.