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You were recently hired by Scheuer Media Inc. to estimate its cost of capital. You obtained the following data: D1 = $1.75; P0 = $47.50;

You were recently hired by Scheuer Media Inc. to estimate its cost of capital. You obtained the following data: D1 = $1.75; P0 = $47.50; g = 7.00% (constant); and F = 5.00%. What is the cost of equity raised by selling new common stock?

a. 10.88% b. 12.18% c. 9.25% d. 8.92% e. 10.77%

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