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A Firm Has Common Stock with a Market Price of $25

Question 37

Multiple Choice

A firm has common stock with a market price of $25 per share and an expected dividend of $2 per share at the end of the coming year. The growth rate in dividends has been 5 percent. The cost of the firm's common stock equity is ________.


A) 5 percent
B) 8 percent
C) 10 percent
D) 13 percent

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