Blair Brothers stock currently has a price of $52 per share and is expected to pay

a year-end dividend of $2.8 per share (D1 = $2.8). The dividend is expected to

grow at a constant rate of 4 percent per year. The company has insufficient retained

earnings to fund capital projects and must, therefore, issue new common stock.

The new stock has an estimated flotation cost of $2 per share. What is the

companys cost of equity capital?

Group of answer choices

10.00%

9.70%

9.80%

9.60%

9.90%