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Compute the approximate cost of new common stock

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Reference no: EM132917701

Problem 1: Expected cash dividends are $4.00, the dividend yield is 9%, flotation costs are 4% of price, and the growth rate is 4%. Compute the approximate cost of new common stock. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Option 1: 14.38%
Option 2: 13.12%
Option 3: 13.38%
Option 4: 15.47%

Reference no: EM132917701

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