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3. (Cost of Capital]. The expected dividend is $1 for a share of stock priced at $25. What is the cost of common equity if
3. (Cost of Capital]. The expected dividend is $1 for a share of stock priced at $25. What is the cost of common equity if the long-term growth in dividends is projected to be 1% assuming the firm raises additional capital via additional common stock issuance? In this case, for every dollar outside investors pay for a new share of common stocks, the financial market charges the firm a service fee of 5 cents per share
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