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In order to meet their capital needs for the next year at Furman need to sell some additional shares of their class a common stock.
In order to meet their capital needs for the next year at Furman need to sell some additional shares of their class a common stock. Flotation costs are estimated to be $2.50 per share. Class a shares currently trading at $25 and most recently paid a dividend of $1.50 per share. The firm expect to grow at a constant 4% for the for seeable future. Calculate the firms cost of common equity from new shares.
6.93%, 6.24%, 6%, 6.67%
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