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Business, 24.04.2020 17:14 sierravick123owr441

Blair Brothers’ stock currently has a price of $50 per share and is expected to pay a year-end dividend of $2.50 per share (D1 = $2.50). The dividend is expected to grow at a constant rate of 4 percent per year. The company has insufficient retained earnings to fund capital projects and must, therefore, issue new common stock. The new stock has an estimated flotation cost of $3 per share. What is the company’s cost of equity capital?

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Blair Brothers’ stock currently has a price of $50 per share and is expected to pay a year-end divid...

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