What is the cost of external equity

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A company just paid a $2 per share dividend on its common stock(D0=$2.00). the dividend is expected to grow at a constant rate of 7 percent per year. the stock currently sells for $42 a share. if the company issues additional stock, it must pay its investment banker a flotation cost of $1 per share. what is the cost of external equity?

Reference no: EM131073207

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