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Business, 09.12.2019 22:31 jaksenpounders

Javits & son's common stock currently trades at $30.00 a share. it is expected to pay an annual dividend of $3.00 a share at the end of the year (d1=$3.00), and the constant growth rate is 5% a year. a) what is the company's cost of common equity if all of its equity comes from retained earning ? b) if the company issued new stock, it would incur a 10% flotation cost. what would be the cost of equity from new stock ?

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