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You are a finance intern at Chambers and Sons and they have asked you to help estimate the company's cost of common equity. You obtained
You are a finance intern at Chambers and Sons and they have asked you to help estimate the company's cost of common equity. You obtained the following data: D1 = $1.25; P0 = $27.50; gL = 5.00% (constant); and F = 6.00%. What is the cost of equity raised by selling new common stock?
Choose from the following:
a. 9.44
b. 10.23
c. 9.84
d. 9.06
e. 10.64
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