Assume that Kish Inc. You have obtained the following data: D0 = $0.90; P0 = $30.00; and g = 7.00% (constant).

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 = $30.00; and g = 7.00% (constant). Based on the DCF approach, what is the cost of equity from retained earnings?

Answer:D0gD1P0 $0.907%$0.96$30 Cost of Equity = (D1/P0) + growth rateCost of Equity =10.21%Formula Used=(C4/C5)+C3