7. The cost of new common stock

A firm will never have to take flotation costs into account when calculating the cost of raising capital from?

A. New common stock

B. Retain earnings .

Alpha Moose Transporters has a current stock price of $33.35 per share, and is expected to pay a per-share dividend of $1.36 at the end of next year. The companys earnings and dividends growth rate are expected to grow at the constant rate of 5.20% into the foreseeable future. If Alpha Moose expects to incur flotation costs of 6.50% of the value of its newly-raised equity funds, then the flotation-adjusted (net) cost of its new common stock (rounded to two decimal places) should be .

A. 9.28%

B. 8.13%

C. 9.56%

D. 7.65%