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Determine the cost of equity capital using gordon

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Problem 1: The DupT corporation plans to do common stock issue to fund its next equity investment project. The market price of the corporation's stock is $ 75 per share. A dividend of $ 5 per share is expected to be paid at the end of the year. The corporation has had an average annual growth of 6%. The issue cost is $ 2.50 per share. Determine the cost of equity capital using Gordon's constant growth method (Gordon Growth Model). You must show the computations to receive credit for your answer.

Reference no: EM132796853

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