Use the information to answer the following questions.

The Global Advertising Company has a marginal tax rate of 40%.

The company can raise debt at an 8% interest rate.

The last dividend paid by Global was $1.10. Globals common stock is selling for $7.93 per share, and its expected growth rate in earnings and dividends is 4%.

Global plans to finance all capital expenditures with 20% debt and 80% equity.

Assume that the floatation cost of new stock issuing is 1.5%. What is Global's cost of common stock if it has to issue new common stock?

Select one:

a.17.99%

b.17.78%

c.18.65%

d.19.65%

e.16.23%