QUESTION 15
A stock is selling in the market at
$100.00
per share. The firm is going to pay the next dividend
(D_(1))
of
$1.75
. Assume that the constant growth rate
g=8%
. The company is selling new stock with a flotation cost
F=5%
. What would be the cost of equity raised by selling new stocks?
6.08%
6.96%
7.85%
8.75%
9.84%
10.58%
11.51%
1245%