Question 4 (2 points) Listen Costly Corporation is considering using equity financing. Currently, the firm's...
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Question 4 (2 points) Listen Costly Corporation is considering using equity financing. Currently, the firm's stock is selling for $66.00 per share. The firm's dividend for next year is expected to be $5.50 with an annual growth rate of 4.0% thereafter indefinitely. If the firm issues new stock, the flotation costs would equal 11.0% of the stock's market value. The firm's marginal tax rate is 40%. What is the firm's cost of internal equity? 11.63% 13.36% 12.67% 13.74% 12.33%
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