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7. Problem 10.04 (Cost of Equity with and without Flotation) Jarett & Sons's common stock currently trades at $40.00 a share. It is expected to
7. Problem 10.04 (Cost of Equity with and without Flotation) Jarett \& Sons's common stock currently trades at $40.00 a share. It is expected to pay an annual dividend of $2.50 a share at the end of the year (O2=32.50), and the canitant growth rate is 4% a veat. 2. What is the comsany's cont of common equily if all of its equity comes from retained earnings? Do not round intermediate calculations. Aound your ansmer to tho decims places. b. If the company issued new stock, it would incur a 15% flotation cost. What would be the cost of equity from new stock? Do not round intermediate caiculatiens. Round your answer to two decimal places. %
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