Stock selling price is Rs 35, expected dividend is Rs 5 and expected growth rate is 8% then cost of common stock would be

To calculate the cost of common stock using the Dividend Discount Model (DDM), we can use the following formula:

Cost of Common Stock (Ke) = (Dividend / Stock Price) + Growth Rate

Given:
Stock Selling Price (P0) = Rs 35
Expected Dividend (D1) = Rs 5
Expected Growth Rate (g) = 8% or 0.08 (expressed as a decimal)

Now, we can calculate the cost of common stock:

Cost of Common Stock (Ke) = (5 / 35) + 0.08
Cost of Common Stock (Ke) ≈ 0.142857 + 0.08
Cost of Common Stock (Ke) ≈ 0.222857

Converting the cost to a percentage:

Cost of Common Stock (Ke) ≈ 0.222857 * 100%
Cost of Common Stock (Ke) ≈ 22.29%

Therefore, the correct answer is B. 22.29%.