Teall development company hired you as a consultant to them estimate its cost of capital. you have been provided with the following data: d1 = $1.45; p0 = $19.00; and g = 6.50% (constant). based on the dcf approach, what is the cost of equity from retained earnings?

14.13%

Explanation:

DCF formula for finding the cost of equity from retained earnings is as follows;

r =

D1 = next year's dividend= $1.45

P0= Current stock price  = $19

g = growth rate of the dividends which is constant in this case indefinitely= 6.50%

Plug in the numbers to the above DCF formula to find r;

r =

Therefore, as a percentage, the cost of equity from retained earnings is 14.13%

The correct answer is Product Support Services.

Product Support Services is a kind of service wherein it is provided by the seller of certain products such as electronics or furniture, wherein they give assistance to their customers through phone calls or through visits that helps their customers solve problems that have been encountered in the product that has been purchased.