A Firm Is Determining Its Cost of Common Stock Equity

question 88

Multiple Choice

A firm is determining its cost of common stock equity.It last paid a dividend of $.52, the dividends are growing at 5%, flotation costs are $2 per share and the firm will net $72 per share upon the sale of the stock.What is the firm's cost of common equity?

• A)3.49%
• B)8.22%
• C)6.11%
• D)5.76%

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