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Corporation Beta sells common stock for $50. The flotation cost for new issue of stocks will be 5%. The company pays 50% of its earnings
Corporation Beta sells common stock for $50. The flotation cost for new issue of stocks will be 5%. The company pays 50% of its earnings in dividends, and a $4 dividend was recently paid. Earnings per a share 5 years ago were $50. Earnings are expected to continue to grow at the same annual rate in the future as during the past 5 years. The tax rate is 25%. g=10%. Calculate (a) internal common equity and (b) external common equity
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