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    Foundations of Financial Management Study Set 1
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    Exam 11: Cost of Capital
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    Expected Cash Dividends Are $2
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Expected Cash Dividends Are $2

Question 27

Question 27

Multiple Choice

Expected cash dividends are $2.50,the dividend yield is 6%,flotation costs are 4%,and the growth rate is 3%.Compute cost of the new common stock.


A) 9.00%
B) 9.25%
C) 9.18%
D) 9.38%

Correct Answer:

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