Builtrite’s common stock is currently selling for $48 a share and the firm just paid an annual dividend of $2.80 per share. management believes that dividends and earnings should grow at 8% annually. since new stock would need to be sold to finance an expansion, builtrite expects flotation costs to be 5% of the expected selling price of $48 a share. based on this, and a marginal tax rate of 34%, what is the cost of new common stock?
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Builtrite’s common stock is currently selling for $48 a share and the firm just paid an annual divid...
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