Dividend is expected to grow at a constant rate

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Asian Trading Company paid a dividend yesterday of $4 per share. The dividend is expected to grow at a constant rate of 7% per year. The price of Asian Trading Company's stock today is $25 per share. If Asian Trading Company decides to issue new common stock, flotation costs will equal $3 per share. Asian Trading Company's marginal tax rate is 35%. Based on the above information, the cost of retained earnings is;

Reference no: EM13763803

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