Computing the cost of external equity

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Reference no: EM131090025

MMM Manufacturing will issue common stock to the public for $40. The expected dividend and the growth in dividends are $3.6 per share and 5%, respectively. If the flotation cost is 10% of the issue's gross proceeds, that is the cost of external equity, re?

Select one:

a. 11%

b. 13%

c. 17%

d. 9%

e. 15%

Reference no: EM131090025

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