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stranahan stranahan
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7 years ago
Use the dividend growth model to determine the required rate of return for equity. Your firm intends to issue new common stock. Your investment bankers have determined that the stock should be offered at a price of $20.00 per share and that you should anticipate paying a dividend of $0.75 in one year. If you anticipate a constant growth in dividends of 3.00% per year and the investment banking firm will take 8.00% per share as flotation costs, what is the required rate of return for this issue of new common stock?
A) 7.08%
B) 7.19%
C) 10.20%
D) 6.83%
Textbook 
Financial Management: Core Concepts

Financial Management: Core Concepts


Edition: 2nd
Author:
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crackerspoppycrackerspoppy
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7 years ago
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stranahan Author
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7 years ago
Thank you for  the help. I had a few questions on a few of them and this really confirmed my answers.
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#3
3 years ago
hoi
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