Calculate the cost of common stock

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Common stock. The firm's common stock is currently selling for $59.43 per share. The stock has paid a dividend that has gradually increased for many years, rising from $2.70 ten years ago to the $4 dividend payment that the company just recently made. If the company wants to issue new common shares, it will sell them $1.50 below the current market value to attract investors, and the company will pay $3 per share in flotation costs.

Question: Calculate the cost of common stock (both retained earnings and new common stock)

Reference no: EM133272515

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