The following data pertains to Tany Company:
Capital structure (considered optimal)
Long term debt (LTD)	20%
Preferred stock (PS)	10%
Common stock (CS)	70%
Tax rate	30%
Expected constant growth rate for
Earnings	5%
Dividends	5%
Last year dividend paid (D0) per share	$3.00
Current selling price of one common share	$60.00
The estimated treasury bonds yield	4%
The estimated market risk premium (MRP)	3%
The estimated company's beta	1.2
The same conditions apply to new security offering:
Preferred stock:
Share price	$100.00
Dividend per share (Dps)	$7.65
Flotation cost per share (F)	$4.00
Long term debt (LTD):
Interest rate (rd)	8%
Assuming that the company will not issue additional common stock share, find
the component cost of
Common stock (assuming CAPM)

1.	between 9% and 10.9%
2.	between 7.7% and 7.99%
3.	between 7.5% and 7.99%
4.	between 6.% and 7%
5.	between 5.5% and 5.8%