Trahan Lumber Company hired you to help estimate its cost of capital.You obtained the following data: D1 = $1.25;P0 = $20.00;g = 5.00% (constant) ;and F = 6.00%.What is the cost of equity raised by selling new common stock?
A) 13.98%
B) 11.65%
C) 12.35%
D) 11.07%
E) 13.75%
Correct Answer:
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