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Estimate the annual after-tax cost of capital for equity

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Question - A company has 400,000 shares of common stock, with a book value of $42/share and a market value of $58/share. Annual dividends are $4.00/share, and annual earnings are $11.00/share. The company is in the 21% marginal tax bracket. Estimate the annual after-tax cost of capital for equity (common stock) funds for this company. Express the answer to three significant digits or more.

Reference no: EM132661112

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