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Jarett & Sons' common stock currently trades at $ 4 0 . 0 0 a share. It is expected to pay an annual dividend of
Jarett & Sons' common stock currently trades at $ a share. It is expected to pay an annual dividend of $ a share at the end of the year
$ and the constant growth rate is a year.
a What is the company's cost of common equity if all of its equity comes from retained earnings? Do not round intermediate calculations. Round your
answer to two decimal places.
b If the company issued new stock, it would incur a flotation cost. What would be the cost of equity from new stock? Do not round calculations. Round your answer to two decimal places.
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