But, 0.47*1.0625 = 0.499375 and that divided by 10.09 = 0.0495, so somewhere there is an error in the decimal placement.
BTW, 0.076 / 10.09 = 0.0075 and not your 0.08.
It seems like you are multiplying by 1.625 not 1.0625. .47(1.625)= .76375 but .47(1.0625)/10.09=.0495
For some reason I cannot get the same answer as It is in the textbook. .47(1+.0625) gives me .076, divided by 10.09 and I get .08. Textbook states that I should have 0.495..What am I doing wrong? Any help would be greatly appreciated
"Estimating the Cost of common equity"