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Question
Hoak Company's common stock is currently selling for $50. Last year's dividend was $1.83 per share. Investors expect dividends to grow at an annual rate of 9% into the future.a. What is Hoak's cost of common equity?
b. Selling new common stock is expected to decrease the price of the stock by $5.00. What is the cost of new common stock? Dividends will remain the same.
Answer
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