Distribute the shares and print prospectuses

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Consider a firm in the 40% tax bracket, which just paid a $ .47 dividend to common stockholders. If the firm estimates that the growth rate in dividends will be 6.25% and the stock is currently selling for $10.09 per share, what is the firm's cost of capital for the stock if it costs the firm $ .50 per share to distribute the shares and print prospectuses?

Reference no: EM132497883

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