To help them estimate the company's cost of capital, Smithco has hired you as a consultant. You have been provided with the following data: D 1 = $1.45; P 0 = $22.50; and g L = 6.50% (constant). Based...

To help them estimate the company's cost of capital, Smithco has hired you as a consultant. You have been provided with the following data: D₁
= $1.45; P₀
= $22.50; and g_L
= 6.50% (constant). Based on the dividend growth approach, what is the cost of common from reinvested earnings?

Group of answer choices