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A company has an expected dividend D 1 of $3.00 per share. Its growth rate is 4%, its common stock now sells for $36. New

A company has an expected dividend D₁ of $3.00 per share. Its growth rate is 4%, its common stock now sells for $36.

New external equity can be sold to net price of 32.40 per share.

Find:

a. Cost of retained earnings

b. Percentage flotation cost

c. Cost of new common stock

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