Manufacturing company is expected to pay dividend

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KayCee Manufacturing Company is expected to pay dividend of $3.50 per share next year. The dividend is expected to grow at a constant rate of 10% per year. The price of KayCee's common stock today is $40 per share. If KayCee decides to issue new common stock, flotation costs will equal 10%. Kaycee's marginal tax rate is 35%. Based on the above information, the cost of internal equity is.

Reference no: EM132073675

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