Muber intends to issue new common stock. The stock is currently trading at $23.00 per share and the dividend this year was $1.20. You know that dividends are expected to grow at rate of 2.5%. If Muber anticipates to pay 3.00% per share in flotation costs, what is the cost of equity? Use the dividend growth model to determine the cost of equity.

Group of answer choices

8.01%

6.22%

7.85%

8.98%

Correct answer is not available