What is Hannibal cost of external equity

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Problem - Hannibal's Restaurants expects to pay a common stock dividend of $4.35 per share next year (d1). Dividends are expected to grow at a 3 percent rate for the foreseeable future. Hannibal's common stock is selling for $30 per share, and issuance costs are $4.25 per share.

Required -

a. What is Hannibal's cost of internal equity?

b. What is Hannibal's cost of external equity?

Reference no: EM132745405

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