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A Firm's Stock Is Selling for $65

Question 72

Multiple Choice

A firm's stock is selling for $65. The dividend yield is 6%. A 7% growth rate is expected for the common stock. The firm's tax rate is 40%. What is the firm's cost of retained earnings?


A) 8.16%
B) 13.00%
C) 12.35%
D) can not be determined.

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