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If the Dividend to Be Paid on a Share of Common

Question 133

Multiple Choice

If the dividend to be paid on a share of common stock $3.30 per share at t1, and the price of the stock is $50, the growth rate is projected as 6%, and the underwriting fee is 5% of the stock price, calculate the cost of new equity.


A) 12.95%
B) 12.30%
C) 12%
D) 12.65%

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