Gulf Electric Company (GEC) uses only debt and equity in its capital structure. It can borrow unlimited amounts at an interest rate of 10 percent so long as it finances at its target capital structure, which calls fo percent debt and 45 percent common equity. Its last dividend was 2.20; its expected constant growth rate is 6 percent; its stock sells on he NYSE ata ce of 5: and new sto . would ne e company e are after flotation costs, GEC's tax rate is 40 percent, and it expects to have $100 million of retained eamings this year, GEC has two projects available: Project A has a cost of 5200 million and a rate of return of 13 percent, whlle Project has a cost of $125 mlilion and a rate of return of 10 percent. All of the company's potential projects are equally risky. Reter to Gulf Electric Company. What is GEC's cost of equity from newly issued stock? a, 10.00% b. 13.33% . 12.66% d. 12.29% e. 13.7790