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Suppose we have complete capital markets ( that is , we are in a Modigliani - Miller world without imperfections ) . A firm has
Suppose we have complete capital markets that is we are in a ModiglianiMiller world without imperfections A firm has pledged to pay a $ per share annual dividend forever. Its cost of equity is and there are outstanding shares. The firm is considering issuing new shares to fund an increase only in the first dividend the dividend goes back to $ per share afterward What is the firm's share price one day before the first dividend is paid if the firm issues the new shares?
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