Musical Charts just paid an annual dividend of $$1\mathrm{.}84$ per share. This dividend is expected to increase by $2\mathrm{.}1$ percent annually. Currently, the firm has a beta of $1\mathrm{.}12$ and a stock price of $$31$ a share. The risk$-$free rate is $4\mathrm{.}3$ percent, and the market rate of return is $12\mathrm{.}3$ percent. What is the cost of equity capital for this firm?

Question $8$Answer

a$.$

$13\mathrm{.}28\%$

b$.$

$11\mathrm{.}21\%$

c$.$

$12\mathrm{.}29\%$

d$.$

$11\mathrm{.}95\%$

e$.$

$10\mathrm{.}71\%$