Interpret the assumptions related to the problem

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Reference no: EM132048640

The expected dividend is $1.50 per share of common stock priced at $15.00. What is the cost of internal common equity if the long-term growth in dividends is projected to be 4% indefinitely?

(i) Describe and interpret the assumptions related to the problem.

(ii) Apply the appropriate mathematical model to solve the problem.

(iii) Calculate the correct solution to the problem.

Reference no: EM132048640

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