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You were recently hired by Garrett Design, Inc. to estimate its cost of common equity. You obtained the following data: D1 = $1.85; P0 =

You were recently hired by Garrett Design, Inc. to estimate its cost of common equity. You obtained the following data: D1 = $1.85; P0 = $44.67; gL = 7.00% (constant); and F = 6.00%. What is the cost of equity raised by selling new common stock?

a. 10.18%

b. 10.76%

c. 10.99%

d. 11.22%

e. 11.41%

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