Question 23 (4 points) Listen Costly Corporation is considering using equity financing. Currently, the firm's...
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Question 23 (4 points) Listen Costly Corporation is considering using equity financing. Currently, the firm's stock is selling for $50.00 per share. The firm's dividend for next year is expected to be $4.70 with an annual growth rate of 7.0% thereafter indefinitely. If the firm issues new stock, the flotation costs would equal 12.0% of the stock's market value. The firm's marginal tax rate is 40%. What is the firm's cost of internal equity? 18.43% 17.68% 17.06% 16.40% 15.46%
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