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A firm's capital structure for its common stock, preferred stock and debt (bond) is 20%, 40% and 40% respectively. The firm's beta is .91. The
A firm's capital structure for its common stock, preferred stock and debt (bond) is 20%, 40% and 40% respectively. The firm's beta is .91. The risk-free rate is 4.76% and the expected return on the market is 8.30%. The firm recently paid a $4.32 preferred stock dividend per share while its price is $95 per share. The firm's 4.25% coupon bond issue trades at par and matures in 25 years. The firm's tax rate is 21%. What is the Cost of the Common Stock? Multiple Choice O 12.31% 7.98% 8.30% 3.22%
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