Adventure Outfitter Corp can sell common stock for $27 per share and its investors require a 17%
return. However, the administrative or flotation costs associated with selling the stock amount to
$2.70 per share.
What is the cost of capital for Adventure Outfitter if the corporation raises money
by selling common stock?
A) 17.00% B) 27.00% C) 18.89% D) 18.33%
C
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