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What is the company cost of common equity

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Reference no: EM133130521

Question - Jarett & Sons' common stock currently trades at $24.00 a share. It is expected to pay an annual dividend of $1.00 a share at the end of the year (D1 = $1.00), and the constant growth rate is 6% a year. What is the company's cost of common equity if all of its equity comes from retained earnings?

If the company issued new stock, it would incur a 13% flotation cost. What would be the cost of equity from new stock?

Reference no: EM133130521

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