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What is the required rate of return

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1. An issue of common stock is selling for $57.20. The year end dividend is expected to be $2.32 assuming a constant growth rate of 6%. What is the required rate of return? 

A) 10.3% 

B) 10.1% 

C) 4.1% 

D) None of the above

2. Expected cash dividends are $2.50, the dividend yield is 6%, flotation costs are 4%, and the growth rate is 3%. Compute cost of new common stock. 

A) 9.00% 

B) 9.25% 

C) 9.18% 

D) 9.44%


Reference no: EM131138774

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