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A firm's new bonds will have a 13% current yield. The current price of common shares is $40.00; the most recent dividend (D0) was $2.00.
A firm's new bonds will have a 13% current yield. The current price of common shares is $40.00; the most recent dividend (D0) was $2.00. The firm's tax rate is 35%. The firm is expected to grow at 9% for the foreseeable future. What is their cost of retained earnings?
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