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The Huggins Co. has determined that a D/E ratio of 1.0 results in an optimal capital structure for the firm. Huggins' common stock currently sells
The Huggins Co. has determined that a D/E ratio of 1.0 results in an optimal capital structure for the firm. Huggins' common stock currently sells for $10 per share. The firm just paid a dividend of $1.00 per share on its common stock, and investors expect the dividend to grow indefinitely at a constant rate of 4 percent per year. What is the firm's cost of common equity? O 17.50% O 12.00% 14.40% 08.01% O 12.32%
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