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Tractor Supply Company hired you to help them estimate their cost of capital. You were provided with the following data. D 1 = $1.25; P

Tractor Supply Company hired you to help them estimate their cost of capital. You were provided with the following data. D1= $1.25; P0= $40.00; g = 6.00%; and F = 5.00%. The firm must issue new common stock. What is the cost of equity raised by selling new common stock?

a. 9.29%

b. 9.40%

c. 9.62%

d. 9.85%

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