You were recently hired by Nast Media Inc. to estimate its cost of capital. You were provided with the following data: D1 = $2.00; P0 = $55.00; g = 8.00% (constant) ; and F = 5.00%. What is the cost of equity raised by selling new common stock?
A) 11.24%
B) 11.83%
C) 12.42%
D) 13.04%
Correct Answer:
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