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Retained earnings versus new common stock Using the data for a firm shown in the following table, calculate the cost of retained earnings and the
Retained earnings versus new common stock
Using the data for a firm shown in the following table, calculate the cost of retained earnings and the cost of new common stock using the constant-growth valuation model.
Current market price per share: $67.00
Dividend growth rate: 9%
Projected dividend per share next year: $4.69
Underpricing per share: $2.50
Flotation cost per share: $1.50
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