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What is cost of equity raised by selling new common stock

Question: Kovach Lumber Company hired you to help estimate its cost of capital. You were provided with the following data: D1 = $1.10; P0 = $27.50; g = 6.00% (constant); and F = 5.00%. What is the cost of equity raised by selling new common stock?

a. 9.41%

b. 9.80%

c. 10.21%

d. 10.62%

e. 11.04%

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Finance Basics: What is cost of equity raised by selling new common stock

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