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The Global Advertising Company Has a Marginal Tax Rate of 40

Question 11

Multiple Choice

The Global Advertising Company has a marginal tax rate of 40 percent. The last dividend paid by Global was $0.90. Global's common stock is selling for $8.59 per share, and its expected growth rate in earnings and dividends is 5 percent. What is Global's cost of common stock?


A) 12.22%
B) 17.22%
C) 10.33%
D) 9.66%
E) 16.00%

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