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Saleem Hotel Inc. expects to pay a common stock dividend of $2.00 per share next...

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Finance

Saleem Hotel Inc. expects to pay a common stock dividend of $2.00 per share next year since the management wants to finance the new capital project. Dividends are expected to grow at a 5.00% constant rate forever. Also, Saleems common stock is currently selling for $20.00 per share and issuance costs are $3.00 per share. Based on the information given, determine Saleems cost of internal equity? a) 14.00% b) 13.50% c) 15.70% d) 15.00%

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