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Question
Marigold Inc.'s common stock currently sells for $40 per share, but the firm will net only $34 per share if it issues new common stock. The firm recently paid a dividend equal to $2 per share on its common stock, and investors expect the dividend to grow indefinitely at a constant rate of 10 percent per year. What is Marigold's cost of new common equity?
a. 15.00%
b. 15.88%
c. 15.50%
d. 16.47%
e. 6.47%
Answer
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Related questions
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