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What is the cost of internal common equity

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Fast Food Corporation's common stock is currently selling for $60. Last year's dividend was $5.00 per share. Investors expect dividends to grow at an annual rate of 8 percent indefinitely. Flotation costs of 3% will be incurred when new stock is sold.

a. What is the cost of internal common equity?

b. What is the cost of new common equity?

Reference no: EM132632711

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