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HELP ME ASAP As the winner of a contest, you are now CFO for the day for Maguire Inc. and your day's job involves raising
HELP ME ASAP
As the winner of a contest, you are now CFO for the day for Maguire Inc. and your day's job involves raising capital for expansion. Maguire's common stock currently sells for $54.00 per share, the company expects to pay a $1.925 next year, and its expected constant growth rate is 6.00%. New stock can be sold to the public at the current price, but a flotation cost of 8% would be incurred. By how much would the cost of new stock exceed the cost of commion from reinvested earnings? a) 0.37% b) 0.19% c) 0.31% d) 0.84% e) 0.56% Step by Step Solution
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