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Sweet Treats common stock is currently priced at $36.72 a share. The company just paid $2.18 per share as its annual dividend. The dividends have
Sweet Treats common stock is currently priced at $36.72 a share. The company just paid $2.18 per share as its annual dividend. The dividends have been increasing by 2.2% annually and expected to continue doing the same. The company has decided to float new issue of stock and the flotation cost is 10%. Calculate the cost of equity is it issues new stock?
A) 8.94%
B) 9.84%
C) 4.2%
D) 12.2%
E) 14.2%
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