Answer:
The cost of common from reinvested earnings is c) 10.44%
Explanation:
Hi, let´s check the equation that we need to use in order to obtain the cost of common from reinvested earnings.
[tex]Cost=\frac{Dividen_{1} }{Price_{0} } +growth[/tex]
So, everything should look like this.
[tex]Cost=\frac{0.67}{27.50} +0.08=0.1044[/tex]
So, the cost of common from reinvested earnings based on the dividend growth approach is 10.44%
Best oi luck
