Respuesta :
Answer:
cost of equity raised by selling new common stock = 9.84%
so correct option is c. 9.84%
Explanation:
given data
D1 = $1.25
Po = $27.50
g = 5.00%
F = 6.00%
to find out
cost of equity raised by selling new common stock
solution
we will apply here cost of equity raised by selling new common stock formula that is express as
cost of equity raised = [tex]\frac{D1}{Po-F*Po}[/tex] + g ..................1
put here value we get
cost of equity raised = [tex]\frac{D1}{Po-F*Po}[/tex] +g
cost of equity raised = [tex]\frac{1.25}{27.50-0.06*27.50}[/tex] + 5%
solve we get
cost of equity raised by selling new common stock = 9.84%
so correct option is c. 9.84%
