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Determine the cost of equity capital using gordon constant

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Reference no: EM133012428

Question 1: The T-Pone corporation plans to do a common stock issue to finance its next equity investment project. The market price of the corporation's stock is $ 85 per share. A dividend of $ 4 per share is expected to be paid at the end of the year. The corporation has had an average annual growth of 7%. The issue cost is $ 3.50 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: EM133012428

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