Please help me study Teall Development Company hired you as a consultant to help them estimate its cost of capital You have been provided with the following data D 1 $1 60 P 0 $20 50 and g 9 50 (constant) Based on the DCF approach, what is the cost of equity The DCF formula needed but not given is Question 2 options a)P 0 D 0 (1 g) (r s g) b)P 0 D 0 (1 g) (r s g) c)D 0 P 0 (1 g) (r s g) d)P 0 D 1 (1 g) (r s g)

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Question: Please help me study. Teall Development Company hired you as a consultant to help them estimate its cost of capital. You have been provided with

Please help me study. 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= $1.60; P₀= $20.50; and g = 9.50% (constant). Based on the DCF approach, what is the cost of equity?

The DCF formula needed but not given is

Question 2 options:

a)P₀= D₀(1 + g) / (r_s- g)

b)P₀= D₀(1 + g) / (r_s+ g)

c)D₀= P₀(1 + g) / (r_s+ g)

d)P₀= D₁(1 + g) / (r_s- g)

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