Final answer:
The cost of common equity for Summerdahl Resort is 11.57%.
Step-by-step explanation:
The cost of common equity can be calculated using the dividend growth model formula.
The formula is: Cost of Common Equity = (Dividend / Current Stock Price) + Dividend Growth Rate.
In this case, the dividend is $1.00 and the current stock price is $28.
The dividend growth rate is 8%.
Using the formula: Cost of Common Equity = ($1.00 / $28) + 0.08
= 0.0357 + 0.08
= 0.1157, or 11.57%.