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What will be the per share cost of the firm new common stock

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Reference no: EM132968321

Problem 1: A firm's common stock is currently selling for $78 per share. Last year's dividend payment was $2.50 per share. The expected constant annual growth rate for the dividend payment is 8%. The flotation cost is $5.00 per share. The firm has decided to issue new common stock to meet its financing needs. What will be the per share cost of the firm's new common stock?

Select one:

a. 11.21%
b. 11.46%
c. 11.70%
d. 12.01%

Reference no: EM132968321

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