Question $8$

$1$ pts

Trahan Lumber Company hired you to help estimate its cost of capital. You obtained the following data: $D1=$$$1\mathrm{.}25$;$PO=$$$45\mathrm{.}00$;$g=5\mathrm{.}00\%($constant$)$; and $F=6\mathrm{.}00\%.$ What is the cost of equity raised by selling new common stock?

$9\mathrm{.}94\%$

$7\mathrm{.}80\%$

$6\mathrm{.}52\%$

$9\mathrm{.}71\%$

$7\mathrm{.}96\%$