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Question
Bouchard Company's stock sells for $20 per share, its last dividend (D0) was $1.00, its growth rate is a constant 6 percent, and the company must pay flotation cost equal to 20 percent when it issues new common stock. What is Bouchard's cost of issuing new common stock?
a. 11.00%
b. 12.25%
c. 12.63%
d. 11.30%
e. 11.56%
Answer
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