What is an estimate of daves cost of equity

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Reference no: EM13280602

P. Daves Inc. hired you as a consultant to help them estimate their cost of equity. The yield on the firm's bonds is 6.5%, and Daves' investment bankers believe that the cost of equity can be estimated using a risk premium of 4.0%. What is an estimate of Daves' cost of equity from retained earnings?

A) 9.77%
B) 10.02%
C) 10.19%
D) 10.33%
E) 10.50%

Reference no: EM13280602

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