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The Jackson Company has just paid a dividend of $3 per share and the current market price of the share is $55. It expects its

The Jackson Company has just paid a dividend of $3 per share and the current market price of the share is $55. It expects its dividend to grow constantly at a growth rate of 10% forever. The firms investment bankers believe that the new issues of common stock would have a flotation cost of 5%.

What would be the cost of new common equity if flotation costs are included?

A)15.25%

B) 16.32%

C) 17%

D) 12.47%

E) 9.85%

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