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Assume that you are a consultant to Broske Inc., and you have been provided with the...

Assume that you are a consultant to Broske Inc., and you have been provided with the following data: D1 = $2.10; P0 = $49.50; and g = 6.00% (constant). What is the cost of equity from retained earnings based on the DCF approach? Enter your answer rounded to two decimal places. Do not enter % in the answer box. For example, if your answer is 0.12345 or 12.345% then enter as 12.35 in the answer box.

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Answer #1

$49.50 Price = D1 = D1/(ke-g) = $2.10 6.00% 4.24% 10.24% ke-g = ke=cost of retained earnings 1 [6% +4.24%)

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