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 = $1.45; P0 = $26.00; and g = 6.50% (constant). Based on the DCF approach, what is the cost of equity from retained earnings?
a. 12.68%
b. 11.84%
c. 10.63%
d. 9.78%
e. 12.08%