A stock's beta is 0.94 and the market risk premium is 6.1% per year. The...
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A stock's beta is 0.94 and the market risk premium is 6.1% per year. The company's common stock has a market value of $12.74 per share and its last dividend was $1.08 per share. The company's dividends are expected to grow forever at a constant rate of 7.3% per year and the tax rate is 35%. If the flotation costs for common stock are 9%, what is the company's annual cost of common stock financing? 1) 16.6% O2) 14.8% 3) 18.2% 4) 15.9% 5) 17.3%
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